Question

Joseph just received an inheritance of $35,775 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 4.75% per year with quarterly compounding for 32 years, how much will he have accumulated?

a. $237,416.b. $71,550.c. $184,622.d. $162,113.

Answer 1

FV= $162,113.25

Step-by-step explanation:

Giving the following information:

Initial investment= $35,775

Interest rate= 0.0475/4= 0.011875

Number of periods= 32*4= 128

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

FV= PV*(1+i)^n

FV= 35,775*(1.011875^128)

FV= $162,113.25