Retirement Funding. Barry has just become eligible for his employer-sponsored retirement plan. Barry is 35
and plans to retire at 65. Barry calculates that he can contribute $3,900
per year to his plan. Barry's employer will match this amount. If Barry can earn a return of 7%
on his investment, how much will he have at retirement?
At retirement, the amount Barry will have is $_______
(Round to the nearest dollar.)
The amount that Barry will have at retirement is computed as shown below:
Simply put the following figures in the financial calculator as shown below:
I = 7
N = 65 - 35
= 30
PMT = $ 3,900 x 2
= - 7,800 (Since we have invested this much of amount, hence taken as negative amount)
PV = 0
Press CPT FV, which will give FV equal to
= 736,794 Approximately
Or we can solve by an alternative method as well:
Simply multiply 7,800 by Future value annuity factor of 7% of 30 years
= 7,800 x 94.4608
= $ 736,794 Approximately
So as we can see the answers from both the methods are same.
Feel free to ask in case of any query relating to this question
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