Question
Kevin plans to start saving for retirement and has the option of choosing between two investment opportunities. Option One: Invest $6,000 per year from ages
Kevin plans to start saving for retirement and has the option of choosing between two investment opportunities.
Option One: Invest $6,000 per year from ages twenty-five through thirty-two (a total of 8 investments) into an account and then leave it untouched until he is sixty-five years old (33 years)
Option Two: Depositing $6,000 into an account every year beginning at age thirty-three until Kevin is sixty-five years old (a total of 33 investments).
Each account earns an average of 11.25% per year. (The investments are end-of-year payments)
Which of the two options presented above will result in a greater future value by the time Kevin reaches sixty-five years old?
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