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I can only put away $2,000 a year toward retirement. I am 25 and plan on retiring at 65 and earning 5%. How much will I have at retirement?

User Unsigned
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2 Answers

2 votes

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.

User Jorvis
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2 votes

Answer: $241599.55

Step-by-step explanation:

The following information can be gotten from the question:

Initial deposit, PV = $0

Rate charged on annuity, RATE= 5%

Number of periods, NPER = 65 - 25 = 40

Annuity payments, PMT = $2000

The amount that'll be gotten at the end of retirement will be gotten after entering the values in a financial calculator and the answer will be:

= $241599.55

User Mnsalim
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