Calculating Future Value of Annuity
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An employee works at the local hamburger restaurant for 40 years and never earns more than minimum wage, which is $12,000 a year. However, this employee is able to save 6% per year, or $720 per year. Over the 40 year period, the employee's investments average 8% interest per year. How much will the employee have in his or her retirement account at the end of the 40 years? What are your thoughts regarding this sum?
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Solution Summary
The solution explains the steps in calculating future value of an ordinary annuity with the help of formula.
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Solution:
Let us assume annual compounding.
This is equivalent ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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