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 ago

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