Shaun Barringer has started on his first job. He plans to start saving for retirement. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn an annual return of 10 percent. How much will Shaun have at the end of 45 years? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

To calculate the future value of an annuity, we can use the formula: 
FV = PMT x [(1 + r)^n -1] / r
where PMT is the annual payment, r is the annual interest rate, and n is the number of years. Plugging in the values for Shaun's savings plan, we get:
FV = 5000 x [(1 + 0.1)^45 - 1] / 0.1
FV = 5000 x [1931.8] / 0.1
FV = $3,594,524
Therefore, the best choice is B.

Shaun Barringer Has Started on His First Job