Question

2. Saul invested an average of $425 per month since age 30 in various securities for his

Answer 1

Answer:

$507.30

Step-by-step explanation:

-Given the monthly deposits are $425 and the interest rate is 3.5% for 30 years.

-The amount of the investment after 30 years is calculated as;

$A=P(1+i/n)^n, n=time \ in \ months\\\\=425(1+0.035/12)^{30\times 12}\\\\=1212.65$

-Assuming Saul started saving at age 20, his investment term will be 40 yrs.

-His investment amount is thus:

$A=P(1+i/n)^n, n=time \ in \ months\\\\=425(1+0.035/12)^{40\times 12}\\\\=1719.95$

#We subtract to find how much more he would have if he started saving at 20;

$=A_{20}-A_{30}\\\\=1719.95-1212.65\\\\=507.30$

Hence, Saul would have $507.30 more had he started saving 10 years earlier.