Assume that for his retirement an investor invests $2,000 per year for 35 years. If the investor can earn ten percent return, what will be the ending value?

Question

Quizplus · Accepted Answer

The ending value of the investment can be calculated using the future value of an annuity formula: FV = P * [((1 + r)^n - 1) / r], where P is the annual payment ($2,000), r is the annual interest rate (10% or 0.10), and n is the number of periods (35 years). Plugging in these values gives FV = $2,000 * [((1 + 0.10)^35 - 1) / 0.10] ≈ $542,049.

Assume That for His Retirement an Investor Invests $2,000 Per