Calculate how much you would have in 10 years if you saved $3,500 a year at an a

Question

Calculate how much you would have in 10 years if you saved $3,500 a year at an annual rate of 6 percent with the company contributing $875 a year. Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

Calculate how much you would have in 10 years if you saved $3,500 a year at an annual rate of 6 percent with the company contributing $875 a year. Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

Explanation / Answer

Total saving per year = $3,500+$875 = $4,375

Future value of annuity = P×[(1+r)^n-1]÷r

r is interest rate per period

P is payment per period

n is number of payments

= $4,375×[(1+6%)^10-1]÷6%

= $57,666

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