2 If we invest

$20,000 per month in an employee retirement account at an annual interest rate of 6 percent compounded monthly, what will be the value of the fund in 10 years?

Each of these questions requires the calculation of future value of money. The formula for calculating future value that appeared earlier in this lesson assumed one principal amount invested at a specific interest rate for an identified time period.

That formula will work to answer the first question.