SOLUTION: The question is: You are working on saving for retirement. You will reach full retirement age in 20 years, and you can invest $5000 each year and can earn 7% annually during this

Question 923438: The question is: You are working on saving for retirement. You will reach full retirement age in 20 years, and you can invest $5000 each year and can earn 7% annually during this period. How much money will you have as you enter the retirement phase of your life, from this investment?
I cannot seem to find the formula for this. Please help!
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
You will use the future value of annuity formula

Rate per period: r = 0.07 (in decimal form)
n = 20 since you have 20 periods (20 years, deposit annually)
P = 5000, the amount you deposit each year

Plug in the given values (see above)

Use a calculator here. You type in "(5000(1+0.07)^20 - 1)/0.07" without quotes

Round to the nearest penny

You will have $276,391.75 when you retire.

------------------------------------------------------------------------

Let me know if that helps or not. Thanks.

If you need more help, feel free to email me at jim_thompson5910@hotmail.com

My Website: http://www.freewebs.com/jimthompson5910/home.html

RELATED QUESTIONS
Can you help me with this question please? 14) Rajesh and Priya plan to retire at age... (answered by ikleyn)

Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement,... (answered by Alan3354)

Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement,... (answered by ikleyn)

You would like to start saving for retirement. Assuming you are now 50 years old and you... (answered by rfer)

You want to be able to withdraw $40,000 from your account each year for 25 years after... (answered by greenestamps)

This is all retirement questions 1. In the short term, which investment carries the... (answered by Boreal)

Hi, I need help solving this problem. I have excercised everything I know from my notes... (answered by Theo)

Suppose you get $1000 as a tax refund this year,and deposit in a retirement account... (answered by Theo)

Eugene began to save for his retirement at age 20, and for 10 years he put $ 550 per... (answered by ikleyn)