You want to start saving for retirement. If you deposit $2000 each year at the end of the next 60 years and earn 11% on the investment, how much will you have when you retire?
A) $9,510,132
B) $10,556,246
C) $1,048,114
D) $792,000

Question

Quizplus · Accepted Answer

This is a future value of an annuity problem, where you calculate the future value of a series of equal payments at regular intervals, compounded at a certain rate. The formula for the future value of an annuity is FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the annual interest rate (as a decimal), and n is the number of payments. Plugging in the values ($2000 annual payments, 11% interest rate, and 60 payments), the calculation gives a future value of approximately $9,510,132, making option A correct.

You Want to Start Saving for Retirement