Doreen is 25 years old today. She invests $3000 today and on every subsequent birthday until her 64th, into a retirement fund that earns 8% annual interest. How much willl be in the fund on her 65th birthday.
Solution:
Total period of investment = 40
Annual investment amount = $3,000
Interest rate = 8%
Amount in fund on her 65th birthday = $3,000 * Cumulative FV factor at 8% for 40 periods of annuity due
= $3,000 * 279.78104 = $839,343
Doreen is 25 years old today. She invests $3000 today and on every subsequent birthday until...