document.write( "Question 1207431: Debbie plans to buy a house for cash instead of paying a mortgage. She is willing to set aside $12 OOO at the end of each year for 15 years. She invests the money in a high-risk mutual fund, which has traditionally earned 9.2% annually. Money decreases in value by 2.5% per annum. How much will Debbie have saved after 15 years?
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Algebra.Com's Answer #845303 by ikleyn(52781) $\"\"$ $\"About$

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\n" ); document.write( "Debbie plans to buy a house for cash instead of paying a mortgage.
\n" ); document.write( "She is willing to set aside $12 OOO at the end of each year for 15 years.
\n" ); document.write( "She invests the money in a high-risk mutual fund, which has traditionally earned 9.2% annually.
\n" ); document.write( "Money decreases in value by 2.5% per annum. How much will Debbie have saved after 15 years?
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document.write( "First, calculate the future value of the ordinary annuity\r\n" );
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document.write( "    FV = ,\r\n" );
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document.write( "where  P is the annual payment at the end of each year (P = %12000);\r\n" );
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document.write( "       r is the rate of 9.2% (which is 0.092 decimal);\r\n" );
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document.write( "       n = 15 is the number of years.\r\n" );
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document.write( "So, FV =  = 357917.24 dollars.\r\n" );
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document.write( "Then convert the todays' dollars into the future dollars at 2.5% inflation\r\n" );
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document.write( "     Debbie's cash in the future dollars =  = 247129.53 future dollars.    ANSWER\r\n" );
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