4. Looking forward - Future value Aa Aa Compounding Interest You know that paying yourself (by depositing money in a savings account) is a prudent start to your retirement plan. You determined that, based on your other obligations, you can save $6,125.00 per year via an annual, single year-end deposit. Let's say that you are age 35 now, so your money will grow for the next 30 years until you reach age 65. You will open a savings account at the Wells Fargo branch near your home. Its savings accounts are paying 6% interest Future Value of Annuity Factors Year 290 390 590 690 890 900 10% 10 10.950 11.460 12.578 13.180 14.48715.19015.937 12 13.412 14.190 15.917 16.870 18.977 20.140 21.384 15 17.293 18.600 21.578 23.270 27.152 29.360 31.772 20 24.29726.870 33.06636.78045.762 51.160 57.274 25 32.030 36.460 47.72654.860 73.105 84.700 98.346 30 40.567 47.570 66.43879.060 113.282 136.300 164.491 35 49.99460.460 90.318 111.430 172.314 215.700 271.018 40 60.401 75.400 120.797154.760 259.052 337.870 442.580 To calculate the value of this nest egg, enter the data provided by entering the correct value in the applicable entry field. Annual savings Years over which it will grow Interest rate Interest factor What will be the value of this money in 30 years? (Note: Round to two decimal places.) You began your savings program at age 35. If you had started five years earlier, such that your funds would grow for savings amount? (Note: Round to two decimal places.) years, what would your nest egg be worth, assuming the same interest rate and annual A new bank in town offers 8% interest. How much would your yearly deposits be worth if you open a savings account there, assuming that your funds are invested for 30 years and all other factors staying the same? To calculate the revised value of your nest egg, reenter the provided data, remembering to change the FVA factor based on the change in interest rate. Annual savings Years over which it will grow Interest rate Interest factor What will be the value of this money in 30 years? (Note: Round to two decimal places.) Again, if you had started your savings program five years earlier, what would your nest egg be worth, assuming that your funds were invested at this higher interest rate, the annual savings amount remains the same, and the funds are invested for years? (Note: Round to two decimal places.)