You will be receiving $5,000 from your family as a graduation present. You have decided to save this money for your retirement. You plan to retire thirty-five years after graduating. How much additional money will you have at that time if you can earn an average of 8.5% on your investment instead of just 8%?
A) $12,971.49
B) $13,008.47
C) $13,123.93
D) $13,234.44
E) $13,309.85

Question

Quizplus · Accepted Answer

The future value of an investment can be calculated using the formula FV = PV * (1 + r)^n. Calculating for both 8% and 8.5% over 35 years and finding the difference gives the additional amount.

You Will Be Receiving $5,000 from Your Family as a Graduation