An investor invests $2,000 per year at the end of each year, with the first deposit at age 20 and...
Question:
An investor invests $2,000 per year at the end of each year, with the first deposit at age 20 and the last deposit at age 30. Assume an interest rate of 10% per annum compounded annually. No more deposits are made after age 30 and the investor accesses the money at age 60. Another investor begins investing at age 30 and invests $2,000 per year at the end of each year, with the last deposit at age 60. Assume an interest rate of 10% per annum compounded annually.
How much does each investor deposit?
Retirement Account Return:
The return on retirement accounts depends on the allocation of funds to different investments, For most accounts this return ranges between 3 and 8%. Considering that this return is tax-free, it is usually sufficient to beat the inflation rate.
Answer and Explanation: 1
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View this answerThe answer is that each investor deposits $2,000 per year for a certain number of years.
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How to Find the Value of an Annuity
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Chapter 21 / Lesson 15
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An annuity is a type of savings account that pays back the investor in the future. Learn the formula used to calculate an annuity's value, and understand the importance of labeling specific numbers to calculate an output over time.
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