Question

Steve is considering investing $564 a year for 43 years. How much will this investment be worth at the end of the 43 years if he earns an average annual rate of return of 3.9 percent? Assume Steve invests his first payment of the end of this yea

Answer 1

$60,473

Step-by-step explanation:

The question is asking to determine the future value.

FV = A × annuity factor

Annuity factor = { [(1+r) ^n] - 1 } / r

FV = Future value

A = amount

R = interest rate

N = number of years

{[(1 + 0.039)^43 ] - 1 } / 0.039 = 107.221939

$564 x 107.221939 = $60,473.17

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