Question 1194167
person A invests 2000 on his 25th birthday until his 34th birthday.
on his 34th birthday he will have $27,632.90 in his account.
he will keep this in his account until his 65th birthday.
the interest rate he is earning on his investment is 7% per ear.
he will have $225,073.09 in his account on his 65th birthday.


person B starts investing each year starting on his 35th birthday and ending on his 65th birthday.
that makes 31 years of investing.
he needs to invest $2,205.02 each year for 31 years so that he can have $225,073.09 in his account on his 65th birthday.


the calculation required to determine the payment person B needs to make each year for 31 years was determined through the use of the ti-ba-ii business analyst calculator.
inputs were:
present value = 0
future value = 225,073.09
number of years = 31
interest rate per year = 7%
payments made at the end of each year.
output was:
payment made at the end of each year = 2205.019925.
this was rounded to 2205.02.


excel was used to do the year by year calculations required to demonstrate that the future value of the investment for person B was the same as the future value of the investment for person A.


that is shown below:


<img src = "http://theo.x10hosting.com/2022/051131.jpg" >
<img src = "http://theo.x10hosting.com/2022/051132.jpg" >


let me know if you have any questions.
theo