Answer:
Total worth of worth of investment= $1,622,099.14
Explanation:
<em>The total amount available in his account would be determined as follows:</em>
<em>The value of the existing current amount in 40 years time</em>
FV = PV × (1+r)^ n
FV- future value
PV- current amount in account
r- interest rate
n- number of years
FV = 35,000 × (1.07)^(40=
FV= 524,106.02
The value of the new annual deposit of 5,500 in 40 years time
This represents an annuity. An annuity is series of constant but equal amount occurring for a certain number of years .
FV= A×( (1+r) -1)/r
FV - future value
R - interests rate
n- number of years
A- annual deposit
FV = 5,500 × ((1+0.07)^40 -1)/0.07
FV= 1,097,993.12
Total worth of worth of investment
= 524,106.02 + 1,097,993.12 = 1,622,099.14
Total worth of worth of investment= $1,622,099.14
