After learning about the time value of money, you decided to open a retirement account. You will invest $475 each month. It earns an annual interest rate of 10.8% per year. Your first deposit will be made one month from now. What is the value of your account in 33 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Retirement account value
After learning about the time value of money, you decided to open a retirement account. You will invest $475 each month. It earns an annual interest rate of 10.8% per year. Your first deposit will be made one month from now. What is the value of your account in 33 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Retirement account value
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:After learning about the time value of money, you decided to open a retirement account.
You will invest $475 each month. It earns an annual interest rate of 10.8% per year.
Your first deposit will be made one month from now. What is the value of your account
in 33 years? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
Retirement account value
Expert Solution
Step 1: Explanation of FV
The FV of an investment refers to the combined worth of the cash flows of the investment at a predetermined future date assuming that they grow to that date at a fixed rate. It is used by investors to compare potential investments and to value their holdings.
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