Answer: (a) When he turns 68 , the account will have = $1,179,415.39
(b) $ 288,000
Step-by-step explanation:
Formula: Future value of annuity =, where P+ periodic payment, r = rate of interest per period, n= number of periods.
As per given, we have
P= $1800
rate of interest = 6% = 0.06
(a) n= 68-28 = 40
Rate per period : r=
Number of periods: n = 4x 40 =160
Now, Future value of amount when Mr. Pink turns 28 years =
Hence, when he turns 68 , the account will have = $1,179,415.39
(b) Total contribution = P × n
=1800 × 160
=$ 288,000
Hence, Total contribution =$ 288,000