Question

You're saving for retirement. If you put away $1,200 each year for 40 years, how much will you have at the end of 40 years if your retirement account earns 3% annually?

Answer 1

answer

Future value of investment has to be calculated by using following formula

FV= CF{(1+r)n-1)r} where= CF= Cash flow per year

r= Rate of return, n= Number of period of investment

Future value= 1200{{1+0.03)40-1)/0.03)}

$ 90481.52

That means, $ 1200 every year investment for 40 years will fetch $ 90481.52 after 40 year