1. You are saving for retirement. You have decided that one year from today you will begin investing 10 percent of your annual salary in a mutual fund which is expected to earn a return of 12 percent per year (compounded semi-annually). Your present salary is $30,000, and you expect that it will grow by 4 percent per year throughout your career (consequently, your investment at time 1 will be $3,000, your investment at time 2 will be $3,120, etc.). You will retire 40 years from today.

a) How much money will you have in your investment account at retirement (assume you make your last investment deposit 40 years from now on the day you retire)?

Answer rating: 100% (QA)

To calculate the total amount of money in the investment account at retirement we need to determine ... View the full answer