Question

You plan to retire in 30 years and you are investing $250 per month in the BMO Large-Cap Growth mutual fund. The fund has an average annual return of 13.45%. How much will you have at retirement?

Answer 1

Accumulated Balance is given by :

`A=P((1+i)^n-1)/(i)* (1+i)`

Here,

n = time period = 30×12 = 360.

`i=(13.45)/(100)* (1)/(12)=0.0112`

P = principal price = $250.

Putting all given values in above equation, we get :

`A=250* ((1+0.0112)^(360)-1)/(0.0112)* (1+0.0112)\\\\A=\$1221659.48`

Hence, this is the required solution.