You are earning an average of 46500 and will retire in 10 years. If you put 20% of your gross average income in an ordinary annuity compounded at 7% annually, what will be the value of the annuity when y ou retire? I am not sure how to figure this out and what it will be. I am using the calculato to figure this out. Can someone get me started here. Thanks

Amount = .2(46500((1.07)^10 - 1)/.07

Using the formula

Amount = payment((1+i)^n - 1)/i

I am trying to do this by calculator here and not sure how to do it

Sn = R[(1+i)^n - 1]/i

Assuming you mean 20% per year going into the retirement fund

Sn = 9300[(1.07)^10 - 1]/.07 =

To figure out the value of the annuity when you retire, you need to calculate the future value of annual contributions compounded annually.

Here's how you can calculate it:

Step 1: Determine the annual contribution
Your average income is $46,500, and you want to put 20% of that into the annuity. So, 20% of $46,500 is:

0.20 * $46,500 = $9,300

Therefore, your annual contribution to the annuity will be $9,300.

Step 2: Determine the number of periods
In this case, the number of periods is the number of years until you retire. Since you will retire in 10 years, the number of periods is 10.

Step 3: Determine the interest rate
The interest rate is given as 7% annually.

Step 4: Calculate the future value
To calculate the future value of the annuity, you can use the formula for calculating the future value of an ordinary annuity:

FV = P * ((1 + r)^n - 1) / r

where:
FV = future value of the annuity
P = annual contribution
r = interest rate per period
n = number of periods

Using the values from above, you can substitute them into the formula:

FV = $9,300 * ((1 + 0.07)^10 - 1) / 0.07

Calculating this using a calculator or Excel will give you the future value of the annuity when you retire.

I hope this helps you get started in calculating the value of the annuity when you retire.