Question

If Alexiss parents also decided to invest $40 per paycheck each, or $2,080/yr. for her college fund, how much will Alexis have in TOTAL in 17 years if the funds average 10%? Mr. and Ms. Navarrete recently won a S6,000,000 lottery. Instead of taking the payout over 20 years they elected to take an immediate cash payout. If interest rates were 5%, how much did Mr. & Ms. Navarrete take hone?
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Answer #1

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the amount required to be calculated is the future value of an annuity of per year investment of 2080

hence future value interest rate factor of annuity (FVIFA) has been calculated for 10% and period of investment of17 years

required future value = FVIFA*2080

H12 2 amount invested per year 2080 17 0.1 5 Future value interest rate factor of annuity (FVIFA) 40.5447 84332.98 4 interest rate 6 amount in total in 17 years 3 10

2 amount invested per year 2080 17 0.1 4 interest rate 5 Future value interest rate factor of annuity (FVIFA) (+B4)B3)-1/4 6 amount in total in 17 years B5 B2

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