Question

You begin working at age 25, and your employer deposits $320 each month into a retirement account that pays an APR of 6% compounded monthly. Make a table that shows the size of your nest egg in terms of the age at which you retire. Include retirement ages from 60 to 70. (Round your answers to the nearest cent.)
Age Nest egg
60 $
61 $
62 $
63 $
64 $
65 $
66 $
67 $
68 $
69 $
70 $

Answer 1

Answer:Future value of a series of payments P for n periods at interest rate n:

FV = P * [(1+i)n - 1] / i

 

P = 340

At age 60, it will have been contributed to for (60-25)*12 = 420 months

The monthly interest rate is 0.06/12 = 0.005

 

FV60 = 340 * [(1.005)420 - 1] / 0.005 = $484,401.50

 

Each year will add 12 months/payments, so n will increase by 12.

FV61 = 340 * [(1.005)432 - 1] / 0.005

and so on.

Step-by-step explanation: