We're going to create a Google Sheet showing the value of an investment in your future. Well compare two different scenarios:
Account A) Investing $1000 when you are 20 years old into an account paying 5% compounded monthly
Account B) Investing $100 the first month and adding $10 at the start of every month after that into an account paying 5% compounded monthly

Question 

1: How much will you have in each account when you are 65 years old?
Does Account B become more valuable than Account A? If so, when?

2: How much will you have in each account if instead of adding $10 per month, you added $20 per month in the second scenario?
In this scenario, how much would you have had to start with (instead of $1000) in Account A to equal the amount in Account B at the age of 65?

   

Answer rating: 100% (QA)

To calculate the value of investments in Account A and Account B at different ages we can use the compound interest formula A P1 rnnt Where A the futu... View the full answer