Question

.Twins Natalie and Kaitlyn are both age 24. They both live in Warren, Ohio. Beginning at age 24, Natalie invests $9,000 per year for ten years and then never sets aside another penny. Kaitlyn waits ten years and then invests $9,000 per year for the next 30 years. Assume they both earn 7 percent. Round your answers to the nearest dollar. (Hint: Use Appendix A-1 and Appendix A-3 or visit the Garman/Forgue companion website.) Round Future Value of a series of Equal Amounts and Future Value of a Single Amount in intermediate calculations to four decimal places.

How much will Natalie have at age 64?
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How much will Kaitlyn have at age 64?

Answer 1

Natalie will have approximately $151,575 at age 64, while Kaitlyn will have approximately $497,815 at age 64.

Step-by-step explanation:

To calculate the future value of an investment, we can use the formula:

FV = P * (1 + r)ⁿ

Where:

• FV is the future value of the investment
• P is the annual investment amount
• r is the interest rate per period
• n is the number of periods

For Natalie's investment, we have:

• P = $9,000
• r = 7% = 0.07
• n = 10 years

Plugging in these values, we get:

FV = $9,000 * (1 + 0.07)¹⁰

Calculating this, Natalie will have approximately $151,575 at age 64.

For Kaitlyn's investment, we have:

• P = $9,000
• r = 7% = 0.07
• n = 30 years

Plugging in these values, we get:

FV = $9,000 * (1 + 0.07)³⁰

Calculating this, Kaitlyn will have approximately $497,815 at age 64.