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    Finding the future value

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    Decide whether the following statement makes sense (or is clearly true) or does not make sense (or is clearly false). Explain your reasoning. If interest rates stay 5% apr and I continue to make my monthly $75 deposits into my retirement plan, I should have at least $40,000 saved when I retire in 25 years.

    The statement______ because I will have $_______ in my retirement account when I retire in 25 years.

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    Solution Preview

    As the annual percentage rate (APR) is R=5%=0.05, if we compound monthly, then the rate would be r=R/12=0.05/12=0.004167.

    For $5$, after 25 years (300 months), it ...

    Solution Summary

    The solution consists of details of finding the future value of an account if depositing $75 monthly for 25 years.