Gayle starts to save at age 20 for an extended vacation around the world that she will take on her 45th birthday. She will contr
ibute $1000 each year to the account, which earns 1.65% annual interest, compounded quarterly. What is the future value of this investment when she takes her trip?
For this case we have the following equation: P (t) = P (1 + r / n) ^ (n * t) Where, P: initial investment r: interest n: periods t: time she will take on her 45th birthday: for t = 25: P (25) = 1000 * (1 + 0.0165 / 4) ^ (4 * 25) P (25) = 1509.31 $ Answer: The future value of this investment when she takes her trip is: P (25) = 1509.31 $
