Lindsay is 25 years old and has a new job in Web development. Lindsay wants to make sure she is...

Question:

Lindsay is 25 years old and has a new job in Web development. Lindsay wants to make sure she is financially sound in 30 years, so she plans to invest the same amount into a retirement account at the end of every year for the next 30 years.

Construct a data table that will show Lindsay the balance of her retirement account for various levels of annual investment and return.

Develop the two-way table for annual investment amounts of $5,000 to $20,000 in increments of $1,000 and for returns of 0 to 12 percent in increments of 1 percent. Note that because Lindsay invests at the end of the year, there is no interest earned on that year's contribution for the year in which she contributes.

Future Value of Annuity:

The future value of the annuity is a calculation that allows determining the accumulated value after a specific time period of equal cash flows that are assumed to earn a given rate of return. The cash flows must take place at equal intervals of time and the rate of return must be adjusted to the frequency of payments.

Answer and Explanation: 1

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Investment/Return 0% 1% 2% 3% 4% 5% 6%
$5,000 150,000.00 173,924.46 202,840.40 237,877.08 280,424.69 332,194.24 ...

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How to Find the Value of an Annuity

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Chapter 21 / Lesson 15
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An annuity is a type of savings account that pays back the investor in the future. Learn the formula used to calculate an annuity's value, and understand the importance of labeling specific numbers to calculate an output over time.


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