Sydney saved 50 000 during her first year of work after college and plans to invest it for her retirement in 40 years how much will she have available for retirement of she can make 8 percent on her investment
Good heavens! From what world did this question come? Fantasyland?
Saved $50,000 in one year??
8% annual interest for 40 years?
The answer is $1,086,250
Xiao Li wishes to accumulate $50,000 by the end of 10 years by making equal annual end-of-year deposits over the next 10 years. If Xiao Li can earn 5 percent on her investments, how much must she deposit at the end of each year?
To calculate how much Sydney will have available for retirement, we can use the formula for compound interest. The formula is:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/amount available for retirement
P = the principal amount (initial investment) -- in this case, $50,000
r = annual interest rate (expressed as a decimal) -- in this case, 8% or 0.08
n = number of times interest is compounded per year -- let's assume it's compounded annually, so n = 1
t = number of years -- in this case, 40 years
Now, let's plug these values into the formula:
A = 50,000(1 + 0.08/1)^(1*40)
Simplifying it further:
A = 50,000(1 + 0.08)^40
Calculating the value inside the parentheses:
A = 50,000(1.08)^40
Using a calculator or computer program, we can raise 1.08 to the power of 40:
A ≈ 50,000(7.17237956)
Calculating the final answer:
A ≈ $358,618.98
Therefore, Sydney will have approximately $358,618.98 available for retirement after 40 years if she can make an 8% return on her investment.