Question

Jak starts to save at age 40 for a vacation home that he wants to buy for his 50th birthday. He will contribute $1000 each quarter to an account, which earns 2.1% interest, compounded annually. What is the future value of the investment, rounded to the nearest dollar, when jak is ready to purchase the vacation home?

Answer 1

`P=\$40840`

Explanation:
`I=840`

From the question we are told that:

Time interval
`t=50-40=>10years`

Annual contribution
`X= 4*1000=>\$4000`

Annual interest rate
`r=2.1\%`

Generally the 10 years interest I is mathematically given by

`I=X*t*r`

`I=4000*0.021*10`

`I=840`

Generally the equation for the future value of the investment
`P` is mathematically given by

`P=X*t+840`

`P=(4000*10)+840`

`P=\$40840`