Question

MVGOY TUI Neuleen U12 QUESTION 4 of 10: You save $500 in a retirement account at age 25. It increases an average of 10% per year until you are 65. Which formula and result indicates how much money you will have in this account at age 65?​

Answer 1

Future value at age of 65 = $22,626.5 (Approx.)

Step-by-step explanation:

Given:

Amount deposit in retirement account = $500

Number of year = 65 year - 25 year = 40

Average rate of increase = 10 %

Find:

Future value at age of 65

Computation:

A = P[1+r]ⁿ

Future value at age of 65 = Amount deposit in retirement account[1+Average rate of increase]ⁿ

Future value at age of 65 = 500[1 + 10%]⁴⁰

Future value at age of 65 = 500[1 + 0.10]⁴⁰

Future value at age of 65 = 500[1.10]⁴⁰

Future value at age of 65 = 500[45.259]

Future value at age of 65 = $22,626.5 (Approx.)