Question

Your brother Sam is now 24 years old and is planning for

retirement. If he deposits $5000 each year into a retirement
account that earns 6% each year, how much will he have when he is
65?

Answer 1

Step-by-step explanation:

present age of Sam is 24

Time(t)=65-24

=41years

Rate(r)=6%per ammum

principle(p)=$5000

Now,

P.t=p((100+R/100)^t)

substituting given value

P.t=5000((106/100)^4)

=5000×10.90286101

=54514.30507

Therefore,$54514.30507 will he have when he is 65.

Answer 2

We can use the formula for the future value of an ordinary annuity to solve this problem:

FV = Pmt x [(1 + r)^n - 1] / r

Where FV is the future value, Pmt is the periodic payment, r is the interest rate per period, and n is the number of periods.

In this case, Sam will be depositing $5,000 each year for 65 - 24 = 41 years. The interest rate is 6% per year (or 0.06).

FV = 5000 x [(1 + 0.06)^41 - 1] / 0.06
FV = 5000 x (146.93) / 0.06
FV = $1,234,709.67

Therefore, when Sam is 65 years old, he will have approximately $1,234,709.67 in his retirement account, assuming he makes annual deposits of $5,000 and earns an annual interest rate of 6%.