You are currently 25 and would like to retire at age 45. You plan to save by making equal investments of $10,000 at the end of each year for the next 20 years. If you are able to earn 8% per year on your investments, how much will you have at the end of the 20 years? Please refer to the table below:
Future Value of an Annuity of $1
$$\begin{array} { | r | r | l | }
\hline \text { Periods } & 8 \% & \quad\quad\quad\
\hline & & \
\hline 12 & 18.98 & \
\hline 13 & 21.5 & \
\hline 14 & 24.21 & \
\hline 15 & 27.15 & \
\hline 16 & 30.32 & \
\hline 17 & 33.75 & \
\hline 18 & 37.45 & \
\hline 19 & 41.45 & \
\hline 20 & 45.76 & \
\hline
\end{array}$$

Question

You are currently 25 and would like to retire at age 45. You plan to save by making equal investments of $10,000 at the end of each year for the next 20 years. If you are able to earn 8% per year on your investments, how much will you have at the end of the 20 years? Please refer to the table below:
Future Value of an Annuity of $1
$$\begin{array} { | r | r | l | } 
\hline \text { Periods } & 8 \% & \quad\quad\quad\
\hline & & \
\hline 12 & 18.98 & \
\hline 13 & 21.5 & \
\hline 14 & 24.21 & \
\hline 15 & 27.15 & \
\hline 16 & 30.32 & \
\hline 17 & 33.75 & \
\hline 18 & 37.45 & \
\hline 19 & 41.45 & \
\hline 20 & 45.76 & \
\hline
\end{array}$$

Quizplus · Accepted Answer

The future value of an annuity formula is used: FV = Pmt * FVIFA. Here, Pmt = $10,000 and FVIFA for 20 years at 8% is 45.76. So, FV = $10,000 * 45.76 = $457,600.

You Are Currently 25 and Would Like to Retire at Age