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ratelena [41]
3 years ago
9

Murphy started putting $100/month into his 401(k) earning 6% APR when he was 22 years old. How much will be in his account when

he retires at age 62, if interest is compounded monthly?
Business
1 answer:
kotykmax [81]3 years ago
8 0

Answer:

$199,149.08

Explanation:

a = 100, i=0.06/12=0.005, n=40*12=480, FVA = Future value of annuity

FVA = A*[(1+i)^n - 1/ i]

FVA = 100 * [(1+0.005)^480 - 1 / 0.005]

FVA = 100 * [9.957454/ 0.005]

FVA = 100 * 1991.4908

FVA = $199,149.08

So, the amount that will be in his account when he retires at age 62 is $199,149.08.

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