Final answer:
To calculate how much you will have at retirement if you can put away $2,000 a year, plan on retiring at 65, and earn 5% interest, you can use the formula for compound interest.
Step-by-step explanation:
To calculate how much you will have at retirement, we can use the formula for compound interest. Given that you can put away $2,000 a year, plan on retiring at 65, and earn 5% interest, we can calculate the future value of your savings using the formula:
Future Value = Present Value * (1 + Interest Rate)^Number of Years
Plugging in the values:
Present Value = $2,000, Interest Rate = 5%, Number of Years = (65 - 25) = 40 years
We can calculate:
Future Value = $2,000 * (1 + 0.05)^40 = $12,734.64
Therefore, you will have approximately $12,734.64 at retirement.