You decide to save for retirement by investing $10,000 a year in an account that will earn a 6% annual rate of return.How much will you have in the account when you retire in 45 years?
A)$450,000
B)$3,277,222
C)$2,127,435
D)$1,256,743

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the total amount: FV = P * [((1 + r)^n - 1) / r], where P is the annual payment ($10,000), r is the annual interest rate (0.06), and n is the number of years (45). Plugging in the values gives approximately $2,127,435.

You Decide to Save for Retirement by Investing $10,000 a Year