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Homework answers / question archive / You have just made your first $5000 contribution to your retirement account

You have just made your first $5000 contribution to your retirement account

Finance

You have just made your first $5000 contribution to your retirement account. Assuming you earn an 11 % rate of return and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing?

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FV= PV* (1+ r)^ t

= 5000* (1+ 11%)^ 45

=  $547,651.21 

 

The no. of years would decreased by 10 years. So "t" would be 35 (45- 10)

FV= PV* (1+ r)^ t

= 5000* (1+ 11%)^ 35

=    $ 192,874.26 

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