Question

Suppose you start saving for retirement by depositing $4,000 every year into your retirement account. If your annual return is 8%, how much will you have in 45 years if all of the deposits were made on the first of the year

Answer 1

FV= $1,546,022.47

Step-by-step explanation:

Giving the following information:

Annual deposit= $4,000

n= 45

i= 0.08

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= future value

i= interest rate

FV= {4,000*[(1.08^45) - 1]} / 0.08

FV= $1,546,022.47