Question

You just won $60,000 on a scratch-off lottery ticket. You plan to save the money in a retirement account expected to return 7% per year. If you intend to retire in 45 years, how much are these lottery winnings expected to be worth when you retire?

Answer 1

Answer:

Total amount after 45 years will be equal to $12+0147.1

Explanation:

We have given initial amount, that is principal value P = $60000

Expected rate of return r = 7 %

Time period n = 45 years

We have to find the amount after 45 years , that is future value

Future value is given by

$A=P(1+\frac{r}{100})^n$, here A is future value P is present value r is rate of interest and n is time period

So $A=60000\times (1+\frac{7}{100})^{45}$

$A=60000\times 1.07^{45}$

$A=60000\times21=1260147.1$ $

So total amount after 45 years will be equal to $12+0147.1