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24 December, 05:13

You are planning to make annual deposits of $5,850 into a retirement account that pays 8 percent interest compounded monthly. how large will your account balance be in 25 years?

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  1. 24 December, 08:39
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    The value of the retirement account will be the future value which is calculated using FV function of Microsoft excel as in = FV (rate, nper, pmt) where

    RATE = Annual interest rate = 8% = 8/100 = 0.08

    NPER = number of periods = number of years = 25

    PMT = Annual deposit = 5850

    Retirement account value = FV (0.08,25,5850) = 427,669.75

    The balance in the retirement account in 25 years = $427,669.75
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