Question

At age 48, Jamal set up a 401(k) where he plans to deposit $15,000 at the beginning of each year until age 70. Find the amount of the annuity if he invests in a stock fund that yields 6% compounded annually. *

Answer 1

900,884.35

Step-by-step explanation:

Deposit = 15,000

i = 6%

n = 1

t = 70 - 48 = 22

So, Fv = Deposit * (1+i/n)^n-t - 1 / i/n

Fv = 15,000 * (1+0.06)^22 - 1 / 0.06

Fv = 15,000 * (1.06)^22 - 1 / 0.06

Fv = 15,000 * 3.60353741658/0.06

Fv = 15,000 * 60.058956943

Fv = 900884.354145

Fv = 900,884.35

Hence, the amount of the annuity if he invests in a stock fund is $900,884.35