Joe and Susan are both 40 years old and hope to have enough money saved to retire by the time they're 65. They deposit $6,000 eachyear into an account that pays 4% interest compounded annually. Use this information to complete the table.
Formula to Use
Account Balance in 20 years
Total Interest Earned
present value of an annuity
future value of a lump sum
future value of an annuity
$99,875
$112,253
$149,875
$249,875
$286,363
Answers
Account balance In 20 years is $249,875 and total interest earned is $99,875.
What is the future value?
The FV formula assumes a constant rate of growth and a single up-front payment left untouched for the duration of the investment. The FV calculation can be done one of two ways, depending on the type of interest being earned.
We have,
P = $6,000
r = 0.04
n = 1
t = 25
We know the formula for future value
FV= PV .
where:
P=Investment amount
R=Interest rate
T=Number of years
According to the question
FV=$6,000×(1+0.04
FV = $249,875
To find the total interest earned, first find the total value of the deposit payments:$6,000 annual payments for 25 years = 6,000 × 25= $150,000
Total interest earned = FV - annually payment for 25 year = $249,875 - $150,000 = $99,875
To learn more about future value from here
#SPJ2
Answer:
Formula: Future value of annuity
In 20 years: $249,875
Total Interest: $99,875
Step-by-step explanation:
Use the formula for future value:
FV =
P = $6,000
r = 0.04
n = 1
t = 25
FV =
FV = $249,875
To find the total interest earned, first find the total value of the deposit payments:
$6,000 annual payments for 25 years = 6,000 • 25
= $150,000
(I copied that explanation from somewhere else so its a little messed up. I just couldn't explain it properly. Hope this helps!)
Related Questions
At the "cloth for you" shop, you can buy a top for £10.00 and a Bermuda trouser for £12.00. Due to a sensational sell, there is a 20% discount on all tops. If you buy one top and two Bermuda trousers, how much money do you spend in total?
Which sentence best describes the interval [-2,1]
Πr2/2 for a half circle Half circle: 1.5 in
PLEASE HELP QUICK I NEED IT TO PASS. PLEASE SHOW STEPS, AND DON'T SPAM LINK PLEASE HELP. I NEED SOME HELP
Answers
Yes it is jndnscjoixglcogkg oyvyvh
Answers
Answers
Answer:
B on edge
Step-by-step explanation:
5^3sqrt10+4^3sqrt10
a $500 to gain an interest of $150 at 7.5% rate.
Answers
Answer:
4 years
Step-by-step explanation:
This is a problem in simple interest: i = prt, where:
p is the principal (intial amount), i is the interest, r is the annual interest rate and t is the time in years.
i
Solving i = prt for t, we get t = ------
pr
$150
which comes out to t = --------------------- = 4 years
($500)(0.075)
Answers
Answer:
55
Step-by-step explanation:
Here 5 is squared and 55 is not.
Hence, the answer is 55
Answers
Answer:
Within the parlance of Statistics, this is called Nominal Data.
Other examples of nominal data are:
- Race
- Country
- Gender etc
Cheers