Kristen the first child, took the path of four year college with a full-time job upon graduation and started saving immediately. She faithfully put $100 a week into an investment account for the next 10 years. She then decided to start a family and be a stay-at-home mom, so she could no longer afford her $100 weekly investment.

Kasey took a different route. After trying a few different education and career options, she started her family having three boys over the next ten years. She struggled paying bills while her family was young, but eventually started her career making a healthy paycheck. She then started contributing to an investment account at $100 per week for the next 20 years.

Both earned an average return of 7% compounded weekly.

Please calculate the following:

What was Kristen's total investment, not including interest?

What was Kasey's total investment, not including interest?

After ten years, how much did Kristen accumulate in her investment account?

After twenty years, how much did Kasey accumulate in her investment account?

If Kristen didn't spend any of her investment, how much did she accumulate over the next twenty years if she continued to earn 7% interest (lump sum investment).

What was Kristen and Kasey's total return on their investment over the thirty-year period?

Looking at the calculations, who accumulated more wealth on their investment? What does this tell you about the time value of money?

Answer rating: 100% (QA)

To solve this problem we need to calculate the total investment the accumulated amount after a certa... View the full answer