If you invest the $10,000 you receive at graduation (age 22)in a mutual fund which averages a 12% annual return, how much will you have at retirement in 40 years?
A)$909,090
B)$930,510
C)$783,879
D)$510,285

Question

Quizplus · Accepted Answer

Using the compound interest formula, we can calculate the amount at retirement:

A = P(1 + r/n)^(nt)
A = 10,000(1 + 0.12/1)^(1*40)
A = 10,000(1.12)^40
A = $930,510.

If You Invest the $10,000 You Receive at Graduation (Age