Question
In: Finance
Walter, who is 20 years old, just inherited $75,000 from his favorite aunt and plans to...
Walter, who is 20 years old, just inherited $75,000 from his favorite aunt and plans to
put the money away for his retirement in 40 years. If Walter can earn an average of 7%
over that time and adds no more to it, how much will Walter have in his retirement
account at age 60?
Solutions
Expert Solution
| A/c balance at age 60 | PV×(1+r)^n | |
| Here, | ||
| A | Interest rate per annum | 7% |
| B | Number of years | 40 |
| C | Number of compoundings per per annum | 1 |
| A÷C | Interest rate per period ( r) | 7% |
| B×C | Number of periods (n) | 40 |
| Present value (PV) | $ 75,000 | |
| A/c balance at age 60 | 1,123,084 | |
| 75000×(1+7%)^40 |
jeff jeffy answered 1 year agoRelated Solutions
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