Question

Sydney saved $10,000 during her first year of work after college and plans to invest it for her retirement in 40 years. how much will she have available for retirement if she can make 8% on her investment?

Answer 1

Given:
P = $10,000, the principal
t = 40 yers, time duration
r = 8% = 0.08, the interest rate
Assume that
n = 12, monthly compounding.

The value after 40 years is
$A=P(1+ \frac{r}{n} )^{nt}$
nt = 12*40 = 480
1 + r/n = 1 + 0.08/12 = 1.0066667
A = 10000*1.0066667⁴⁸⁰ = $242,737.71

Answer:  $242,737.71