Leon and Heidi decided to invest $3,000 annually for only the first seven years of their marriage. The first payment was made at age 20. If the annual interest rate is 9%, how much accumulated interest and principal will they have at age 65?
Leon and Heidi decided to invest $3,000 annually for only the first seven years of their marriage. The first payment was made at age 20. If the annual interest rate is 9%, how much accumulated interest and principal will they have at age 65?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Leon and Heidi decided to invest
$3,000
annually for only the first
seven
years of their marriage. The first payment was made at age
20.
If the annual interest rate is
9%,
how much accumulated interest and principal will they have at age
65?
Click the icon to view the interest and annuity table for discrete compounding when
i=9%
per year.Question content area bottom
Part 1
The accumulated interest and principal will equal
(Round to the nearest dollar.)
Transcribed Image Text:### Case Study: Investment Strategy of Leon and Heidi
**Scenario:**
Leon and Heidi decided to invest $3,000 annually for the first seven years of their marriage. The first payment was made at age 20. They aim to determine how much accumulated interest and principal they will have by the age of 65, assuming an annual interest rate of 9%.
#### Calculation Approach:
- **Annual Investment**: $3,000
- **Investment Duration**: 7 years
- **Start Age**: 20 years
- **Compounding Interest Rate**: 9% per annum
- **Age at Calculation**: 65 years
#### Interactive Tool:
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