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An engineer places $5,000 at the end of every year into a retirement account for 25 years. If the account into which the savi

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Answer #1

Answer

Formula :

Future Value of periodic payment is given by :

FV = (P/r)((1 + r)n - 1)

where FV = Future value or value after n years that we have to calculate, P = Period value = 5000, r = interest rate of a period = 8% = 0.08 and n = time period = 25

Hence using above formula we have :

FV = (5000/0.08)((1 + 0.08)25 - 1) = 365529.7 = 366000(nearest thousand)

Hence, At the end of his career he will have $366000

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