Question

You just won $60,000 on a scratch-off lottery ticket. You plan to save the money in a retirement account expected to return 7% per year. If you intend to retire in 45 years, how much are these lottery winnings expected to be worth when you retire?

Answer 1

Total amount after 45 years will be equal to $12+0147.1

Step-by-step explanation:

We have given initial amount, that is principal value P = $60000

Expected rate of return r = 7 %

Time period n = 45 years

We have to find the amount after 45 years , that is future value

Future value is given by

`A=P(1+(r)/(100))^n`, here A is future value P is present value r is rate of interest and n is time period

So
`A=60000* (1+(7)/(100))^(45)`

`A=60000* 1.07^(45)`

`A=60000*21=1260147.1` $

So total amount after 45 years will be equal to $12+0147.1