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You start saving $1,000 at the end of this year and increase your saving by 5%...

You start saving $1,000 at the end of this year and increase your saving by 5% every year for 18 years. Your account earns 13%. How much will you have in your account in 18 years?

Solutions

Expert Solution

Future Value of Growing Annuity = P/(r - g)[(1 + r)n - (1 + g)n]

Future Value = 1,000/(0.13 - 0.05)[(1.13)18 - (1.05)18]

Future Value = $82,720.61

jeff jeffy answered 2 years ago
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