You are depositing $1,500 in a retirement account today and expect to earn an average return of 7.5 percent on this money.How much additional income will you earn if you leave the money invested for 45 years instead of just 40 years?
A)$10,723.08
B)$11,790.90
C)$12,441.56
D)$12,908.19
E)$13,590.93

Question

Quizplus · Accepted Answer

Future value = $1,500 × (1 + .075)⁴⁵ = $38,857.26Future value = $1,500 × (1 + .075)⁴⁰ = $27,066.36Difference = $38,857.26 - $27,066.36 = $11,790.90

You Are Depositing $1,500 in a Retirement Account Today and Expect