computing future value. calucale the future value of a retirement account in which you deposit $2,000 a year for 30 years with an annual interest rate of 7 percent.

Jenny intends to retire in 20 years. Upon retirement, she will require a yearly cash flow of $80,000 for

25 years to support her lifestyle (yearly cash flows assumed to occur at the end of each year).
Anticipating her retirement plan, she started investing $6,000 per year five years ago and will continue to do so for 20 more years. How much more will Jenny have to invest each year for the next 20 years to have the necessary funds for her retirement? Use a 10% per year discount rate throughout this problem (for discounting or compounding).

To calculate the future value of a retirement account, you can use the formula for compound interest:

Future Value = P * (1 + r)^n

Where:
- P is the principal amount (the deposit you make each year)
- r is the annual interest rate
- n is the number of years

In your case, you deposit $2,000 each year for 30 years with an annual interest rate of 7 percent.

Step 1: Convert the annual interest rate to a decimal. To do this, divide the annual interest rate by 100:
7% / 100 = 0.07

Step 2: Calculate the future value using the formula:
Future Value = $2,000 * (1 + 0.07)^30

Let's calculate it:

Future Value = $2,000 * (1 + 0.07)^30

To simplify the calculation, you can use a calculator or a spreadsheet to evaluate the exponent first:

Future Value = $2,000 * (1.07)^30

Calculating the exponent gives us:

Future Value = $2,000 * 5.427
Future Value = $10,854

Therefore, the future value of your retirement account after 30 years with a $2,000 deposit each year at an annual interest rate of 7 percent will be $10,854.