Question

Elaine plans on saving $2,000 a year and expects to earn an annual rate of 8.8 percent. How much will she have in her account at the end of 43 years?

Answer 1

Answer:

$831,532.24

Step-by-step explanation:

The amount that will be in her account at ordinary annuity is derived using the formula:

$A(n) = \dfrac{P((1 + r)^{n}-1)}{r}$

Where:

Yearly Deposit,P=$2000

Annual rate,r=8.8%=0.088

Number of Years,n=43 years

$A(43) = \dfrac{2000((1 + 0.088)^{43}-1)}{0.088}\\\dfrac{2000[(1 .088)^{43}-1]}{0.088}\\A(43)=\ 831,532.24$

At the end of 43 years, she would have $831,532.24 in her account.