Question

You have just made your first $5,700 contribution to your retirement account. Assuming you earn an 13 percent rate of return and make no additional contributions, your retirement account will be worth $592,728 when you retire in 38 years. What will your account be worth at retirement if you had waited 7 years before making the $5,700 contribution? (Round time value factors to 6 decimal places and final answer to the nearest dollar amount)

Answer 1

Correct Answer : your account Will be worth $ 251,946 at retirement if you had waited 7 years before making the $5,700 contribution

Solution: Amount = Principle(1+r/100)^t

Amount = $592728

Principle = $ 5700

Rate = 13%    

Time1 = 38 years

Time2 38-7= 31years

Therefore, 5700(1+13/100)^31

= 5700(1.13)^31

= 5700* 44.20096

= $ 251946

Nearest Dollar Amount = $ 251946

beginning balance	Future value factor table	ending balance	year
$          5,700.00	$                       1.130000	$                 6,441	1
$          6,441.00	$                       1.276900	$                 7,278	2
$          7,278.33	$                       1.442897	$                 8,225	3
$          8,224.51	$                       1.630474	$                 9,294	4
$          9,293.70	$                       1.842435	$               10,502	5
$        10,501.88	$                       2.081952	$               11,867	6
$        11,867.12	$                       2.352605	$               13,410	7
$        13,409.85	$                       2.658444	$               15,153	8
$        15,153.13	$                       3.004042	$               17,123	9
$        17,123.04	$                       3.394567	$               19,349	10
$        19,349.03	$                       3.835861	$               21,864	11
$        21,864.41	$                       4.334523	$               24,707	12
$        24,706.78	$                       4.898011	$               27,919	13
$        27,918.66	$                       5.534753	$               31,548	14
$        31,548.09	$                       6.254270	$               35,649	15
$        35,649.34	$                       7.067326	$               40,284	16
$        40,283.76	$                       7.986078	$               45,521	17
$        45,520.64	$                       9.024268	$               51,438	18
$        51,438.33	$                     10.197423	$               58,125	19
$        58,125.31	$                     11.523088	$               65,682	20
$        65,681.60	$                     13.021089	$               74,220	21
$       74,220.21	$                     14.713831	$               83,869	22
$        83,868.84	$                     16.626629	$               94,772	23
$        94,771.78	$                     18.788091	$           1,07,092	24
$    1,07,092.12	$                     21.230542	$           1,21,014	25
$    1,21,014.09	$                     23.990513	$           1,36,746	26
$    1,36,745.92	$                     27.109279	$           1,54,523	27
$    1,54,522.89	$                     30.633486	$           1,74,611	28
$    1,74,610.87	$                     34.615839	$           1,97,310	29
$    1,97,310.28	$                     39.115898	$           2,22,961	30
$    2,22,960.62	$                     44.200965	$           2,51,946	31
$    2,51,945.50	$                     49.947090	$           2,84,698	32
$    2,84,698.41	$                     56.440212	$           3,21,709	33
$    3,21,709.21	$                     63.777439	$           3,63,531	34
$    3,63,531.40	$                     72.068506	$           4,10,790	35
$    4,10,790.49	$                     81.437412	$           4,64,193	36
$    4,64,193.25	$                     92.024276	$           5,24,538	37
$    5,24,538.37	$                  103.987432	$           5,92,728	38