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You have just made your first $5,500 contribution to your retirement account. Assume you earn a return of 10 percent per year and make no additional contributions. a.What will your account be worth when you retire in 45 years

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pedrocarratore

Answer:

$400,897.66

Explanation:

Assuming that no further contributions will be made and that interest is compounded annually, the expression that describes the future value of a principal amount 'P', deposited at an annual rate 'r', for a period of 'n' years is:

[tex]FV = P*(1+r)^n[/tex]

For a 45-year $5,500 investment at a rate of 10% per year, the future value is:

[tex]FV = 5,500*(1+0.10)^45\\FV=\$400,897.66[/tex]

The account will be worth $400,897.66 when you retire.