Question
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
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 $5,875.00 per year via an annual, single year-end deposit. You are 35 years old now, so your money will grow for the next 30 years until you turn 65. You will open a savings account at the Wells Fargo branch near your home. Its savings accounts are paying 6% interest.
The following table shows the future value factors for various periods and interest rates:
Future Value of an Annuity Factor
Year | 2% | 3% | 5% | 6% | 8% | 9% | 10% |
---|---|---|---|---|---|---|---|
10 | 10.950 | 11.460 | 12.578 | 13.180 | 14.487 | 15.190 | 15.937 |
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 | 24.297 | 26.870 | 33.066 | 36.780 | 45.762 | 51.160 | 57.274 |
25 | 32.030 | 36.460 | 47.726 | 54.860 | 73.105 | 84.700 | 98.346 |
30 | 40.567 | 47.570 | 66.438 | 79.060 | 113.282 | 136.300 | 164.491 |
35 | 49.994 | 60.460 | 90.318 | 111.430 | 172.314 | 215.700 | 271.018 |
40 | 60.401 | 75.400 | 120.797 | 154.760 | 259.052 | 337.870 | 442.580 |
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