Question

You have just started a new job and plan to save $4,950 per year for 41 years until you retire. You will make your first deposit in one year. How much will you have when you retire if you earn an annual interest rate of 9.89 percent

Answer 1

$2,341,579.57

Step-by-step explanation:

Data given in the question

Annuity value = $4,950

Annual interest rate = 9.89%

Time period = 9.89%

So, by considering the above information, the future value of an annuity is

Future value of annuity = Annuity × [(1 + interest rate)^time period - 1] ÷rate

= $4,950 × [(1.0989)^41 - 1] ÷ 0.0989

=$4,950 × 473.0463785846

= $2,341,579.57