Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

Question

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Gordon saves for 20 years, which is 240 months. Using the future value of an annuity formula for monthly compounding: FV = Pmt * [(1 + r)^n - 1] / r, where Pmt = $25, r = 0.04/12, and n = 240. This calculation results in approximately $9,169.

Gordon Started Saving $25 a Month at Age 20 in an Account