Smith is saving for his eventual retirement. He plans to make 18 contributions to his retirement account
Question:
Smith is saving for his eventual retirement. He plans to make 18 contributions to his retirement account at the beginning of each of the next 18 years. The first contribution will be made right now (today, t=0) and the final contribution will be made 17 years from today (i.e., at t=17). The retirement account will earn a return of 10%/ year. If each of Mr. Smith’s contributions is $3000, how much will be in his retirement account 17 years from now? Notice that this question asks for a value at t=17, i.e., at the same time as the final contribution. [Suggestion: Draw a timeline and also refer to the Lesson?2 handout titled “One Overarching Annuity Example”.]
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs