# Math

James has set up an ordinary annuity to save for his retirement in 19 years. If his monthly payments are \$250 and the annuity has an annual interest rate of 7.5%, what will be the value of the annuity when he retires?

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1. No. How can the value of the annuity be less than the monthly payment?

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Ms. Sue
2. How would I solve the problem the right way then?

I don't understand how to solve it.

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3. Would the answer be 30336.9?

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4. No.

19 * 12 * 250 = \$57,000

That's the amount he's invested. Now multiply that by 1.075 (interest rate) to find the amount of the annuity.

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Ms. Sue
5. So, would the answer be 4275?

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6. No.

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Ms. Sue

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