Question

After you graduate, you plan to work for another twenty years and then retire and move to a low-cost area. You think you can save $2500 a year for the first 5 years, and $3500 a year for the next 10 years, and $6000 a year for the last 5 years. If you can earn 3.5% a year on your savings in a reasonably safe investment, how much will you have from these savings when you retire?

Answer 1

Future Value = SUm [ Cash Flow * FVF(r%, n) ]

Future Value Factor:
FVF(r%, n) = ( 1 + r )^n
r = Int Rate per period/ Year
n = Balance Periods/ years

Year	Bal Years	CF	FVF @3.5 %	FV of CFs
1	19	$      2,500.00	1.9225	$             4,806.25
2	18	$      2,500.00	1.8575	$             4,643.72
3	17	$      2,500.00	1.7947	$             4,486.69
4	16	$      2,500.00	1.7340	$             4,334.97
5	15	$      2,500.00	1.6753	$             4,188.37
6	14	$      3,500.00	1.6187	$             5,665.43
7	13	$      3,500.00	1.5640	$             5,473.85
8	12	$      3,500.00	1.5111	$             5,288.74
9	11	$      3,500.00	1.4600	$             5,109.89
10	10	$      3,500.00	1.4106	$             4,937.10
11	9	$      3,500.00	1.3629	$             4,770.14
12	8	$      3,500.00	1.3168	$             4,608.83
13	7	$      3,500.00	1.2723	$             4,452.98
14	6	$      3,500.00	1.2293	$             4,302.39
15	5	$      3,500.00	1.1877	$             4,156.90
16	4	$      6,000.00	1.1475	$             6,885.14
17	3	$      6,000.00	1.1087	$             6,652.31
18	2	$      6,000.00	1.0712	$             6,427.35
19	1	$      6,000.00	1.0350	$             6,210.00
20	0	$      6,000.00	1.0000	$             6,000.00
FV of Cash flow				$        103,401.05

Amount saved after 20 years is $ 103401.05