You have just made your first $4,600 contribution to your retirement account. As

Question

You have just made your first $4,600 contribution to your retirement account. Assume you earn a return of 12 percent per year and make no additional contributions a. What will your account be worth when you retire in 31 years? (Do not round Intermedlate calculetlons and round your answer to 2 declmal places, e.g., 32.16.) b. What If you walt 10 years before contributing? (Do not round Intermediate calculetions and round your answer to 2 declmal places, e.g., 32.16.) a Future value for starting now b. Future value if waiting 10 years

Explanation / Answer

a.

Investment is for 31 years

Future value = Present value x (1+Rate)^Years

Future value = 4600 x (1+12%)^31

Future value = $154,353.52

b.

10 years waiting then, Investment is for 21 years;

Future value = Present value x (1+Rate)^Years

Future value = 4600 x (1+12%)^21

Future value = $49,697.70

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