Connect-Class Comett, Fir C Chegg Study Guided Solut Finance? Flashcerds Quidlet

Question

Connect-Class Comett, Fir C Chegg Study Guided Solut Finance? Flashcerds Quidlet htm QSearch Assume you are 45 years old and that you currently have $82.000 in a retirement account. You plan to contribute $3,800 each year into your retirement account If the current amount (pv) and the new contributions (PMT) both earn a 5 percent returnm, how much should you expect to have when you retire in 20 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) C Prev 22 of 23 Next> le

Explanation / Answer

Current amount in the retirement account is $82000 and rate of Interest is 5%

then the value after 20 years is

FV = P(1+r)n = 82000 (1+0.05)20 = 82000 * 2.653 = 217570.41$

And the Future Value of the amount is deposited annually @ 5% is

FV = P * FVAF( r , n years) = 3800$ * FVAF( 5% , 20 years )

= 3800$ * 33.669 = 127943.16 $

Therefore Total amount after 20 years in the account is

= 217570.41 + 127943.16 = 345513.57$

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