1. Calculate the amount of money someone would accumulate if they earned $30,000
ID: 2426591 • Letter: 1
Question
1. Calculate the amount of money someone would accumulate if they earned $30,000 per year, with no future raises, and saved 12.4% of their income each year, and could compound that amount at the following rates of return for 40 years:
2% per annum
5% per annum
8% per annum
12% per annum
15% per annum
For each interest rate show the amount of assets that would be accumulated at the end of 5 years, 10 years, 15 years, 20 years, 25 years, 30 years, 35 years and 40 years, and, the income that would be generated at that rate of interest for the following year.
Explanation / Answer
This is also calculated by direct formula:
Future value = Cash Flow (1+r)n
where r = rate of interest.
n = Number of years
Saving per year = 30000* 12.40% $ 3,720.00 Year Opening Balance of investments Interest earned@2% Closing Balance of investments Opening Balance of investments Interest earned@5% Closing Balance of investments Opening Balance of investments Interest earned@8% Closing Balance of investments Opening Balance of investments Interest earned@12% Closing Balance of investments Opening Balance of investments Interest earned@15% Closing Balance of investments 1 3720.00 74.40 3794.40 3720.00 186.00 3906.00 3720.00 297.60 4017.60 3720.00 446.40 4166.40 3720.00 558.00 4278.00 2 7514.40 150.29 7664.69 7626.00 381.30 8007.30 7737.60 619.01 8356.61 7886.40 946.37 8832.77 7998.00 1199.70 9197.70 3 11384.69 227.69 11612.38 11727.30 586.37 12313.67 12076.61 966.13 13042.74 12552.77 1506.33 14059.10 12917.70 1937.66 14855.36 4 15332.38 306.65 15639.03 16033.67 801.68 16835.35 16762.74 1341.02 18103.76 17779.10 2133.49 19912.59 18575.36 2786.30 21361.66 5 19359.03 387.18 19746.21 20555.35 1027.77 21583.12 21823.76 1745.90 23569.66 23632.59 2835.91 26468.50 25081.66 3762.25 28843.91 6 23466.21 469.32 23935.53 25303.12 1265.16 26568.27 27289.66 2183.17 29472.83 30188.50 3622.62 33811.12 32563.91 4884.59 37448.49 7 27655.53 553.11 28208.64 30288.27 1514.41 31802.69 33192.83 2655.43 35848.25 37531.12 4503.73 42034.86 41168.49 6175.27 47343.77 8 31928.64 638.57 32567.22 35522.69 1776.13 37298.82 39568.25 3165.46 42733.72 45754.86 5490.58 51245.44 51063.77 7659.57 58723.33 9 36287.22 725.74 37012.96 41018.82 2050.94 43069.76 46453.72 3716.30 50170.01 54965.44 6595.85 61561.29 62443.33 9366.50 71809.83 10 40732.96 814.66 41547.62 46789.76 2339.49 49129.25 53890.01 4311.20 58201.21 65281.29 7833.76 73115.05 75529.83 11329.47 86859.31 11 45267.62 905.35 46172.97 52849.25 2642.46 55491.71 61921.21 4953.70 66874.91 76835.05 9220.21 86055.26 90579.31 13586.90 104166.20 12 49892.97 997.86 50890.83 59211.71 2960.59 62172.30 70594.91 5647.59 76242.50 89775.26 10773.03 100548.29 107886.20 16182.93 124069.13 13 54610.83 1092.22 55703.05 65892.30 3294.61 69186.91 79962.50 6397.00 86359.50 104268.29 12512.19 116780.48 127789.13 19168.37 146957.50 14 59423.05 1188.46 60611.51 72906.91 3645.35 76552.26 90079.50 7206.36 97285.86 120500.48 14460.06 134960.54 150677.50 22601.63 173279.13 15 64331.51 1286.63 65618.14 80272.26 4013.61 84285.87 101005.86 8080.47 109086.33 138680.54 16641.66 155322.20 176999.13 26549.87 203549.00 16 69338.14 1386.76 70724.90 88005.87 4400.29 92406.16 112806.33 9024.51 121830.84 159042.20 19085.06 178127.27 207269.00 31090.35 238359.35 17 74444.90 1488.90 75933.80 96126.16 4806.31 100932.47 125550.84 10044.07 135594.91 181847.27 21821.67 203668.94 242079.35 36311.90 278391.25 18 79653.80 1593.08 81246.88 104652.47 5232.62 109885.09 139314.91 11145.19 150460.10 207388.94 24886.67 232275.61 282111.25 42316.69 324427.94 19 84966.88 1699.34 86666.22 113605.09 5680.25 119285.35 154180.10 12334.41 166514.51 235995.61 28319.47 264315.09 328147.94 49222.19 377370.13 20 90386.22 1807.72 92193.94 123005.35 6150.27 129155.62 170234.51 13618.76 183853.27 268035.09 32164.21 300199.30 381090.13 57163.52 438253.65 21 95913.94 1918.28 97832.22 132875.62 6643.78 139519.40 187573.27 15005.86 202579.13 303919.30 36470.32 340389.61 441973.65 66296.05 508269.69 22 101552.22 2031.04 103583.26 143239.40 7161.97 150401.37 206299.13 16503.93 222803.06 344109.61 41293.15 385402.77 511989.69 76798.45 588788.15 23 107303.26 2146.07 109449.33 154121.37 7706.07 161827.44 226523.06 18121.84 244644.90 389122.77 46694.73 435817.50 592508.15 88876.22 681384.37 24 113169.33 2263.39 115432.71 165547.44 8277.37 173824.81 248364.90 19869.19 268234.10 439537.50 52744.50 492282.00 685104.37 102765.66 787870.02 25 119152.71 2383.05 121535.77 177544.81 8877.24 186422.05 271954.10 21756.33 293710.42 496002.00 59520.24 555522.24 791590.02 118738.50 910328.53 26 125255.77 2505.12 127760.88 190142.05 9507.10 199649.15 297430.42 23794.43 321224.86 559242.24 67109.07 626351.30 914048.53 137107.28 1051155.81 27 131480.88 2629.62 134110.50 203369.15 10168.46 213537.61 324944.86 25995.59 350940.45 630071.30 75608.56 705679.86 1054875.81 158231.37 1213107.18 28 137830.50 2756.61 140587.11 217257.61 10862.88 228120.49 354660.45 28372.84 383033.28 709399.86 85127.98 794527.84 1216827.18 182524.08 1399351.26 29 144307.11 2886.14 147193.25 231840.49 11592.02 243432.51 386753.28 30940.26 417693.55 798247.84 95789.74 894037.59 1403071.26 210460.69 1613531.94 30 150913.25 3018.27 153931.52 247152.51 12357.63 259510.14 421413.55 33713.08 455126.63 897757.59 107730.91 1005488.50 1617251.94 242587.79 1859839.74 31 157651.52 3153.03 160804.55 263230.14 13161.51 276391.65 458846.63 36707.73 495554.36 1009208.50 121105.02 1130313.52 1863559.74 279533.96 2143093.70 32 164524.55 3290.49 167815.04 280111.65 14005.58 294117.23 499274.36 39941.95 539216.31 1134033.52 136084.02 1270117.54 2146813.70 322022.05 2468835.75 33 171535.04 3430.70 174965.74 297837.23 14891.86 312729.09 542936.31 43434.90 586371.21 1273837.54 152860.50 1426698.04 2472555.75 370883.36 2843439.11 34 178685.74 3573.71 182259.46 316449.09 15822.45 332271.54 590091.21 47207.30 637298.51 1430418.04 171650.17 1602068.21 2847159.11 427073.87 3274232.98 35 185979.46 3719.59 189699.05 335991.54 16799.58 352791.12 641018.51 51281.48 692299.99 1605788.21 192694.58 1798482.79 3277952.98 491692.95 3769645.93 36 193419.05 3868.38 197287.43 356511.12 17825.56 374336.68 696019.99 55681.60 751701.59 1802202.79 216264.34 2018467.13 3773365.93 566004.89 4339370.82 37 201007.43 4020.15 205027.58 378056.68 18902.83 396959.51 755421.59 60433.73 815855.32 2022187.13 242662.46 2264849.58 4343090.82 651463.62 4994554.44 38 208747.58 4174.95 212922.53 400679.51 20033.98 420713.49 819575.32 65566.03 885141.34 2268569.58 272228.35 2540797.93 4998274.44 749741.17 5748015.61 39 216642.53 4332.85 220975.38 424433.49 21221.67 445655.16 888861.34 71108.91 959970.25 2544517.93 305342.15 2849860.08 5751735.61 862760.34 6614495.95 40 224695.38 4493.91 229189.28 449375.16 22468.76 471843.92 963690.25 77095.22 1040785.47 2853580.08 342429.61 3196009.69 6618215.95 992732.39 7610948.34Related Questions
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