A. Time Value of Money 1. How much money would you accumulate by investing 1500

Question

A. Time Value of Money 1. How much money would you accumulate by investing 1500 at the end of each year beginning at age age 22 and continuing the practice through 1196 35 at an annual rate of 4000 at the end of each year Compare the result with investing at the same 11% rate from age 35 through age 65 a. Future value of investing 1500 for I3 years (1.0) 34,317.46 Accumulated value of fund by age (1.0) 65 30years (1.0) 26.083 , b. Future value of investing 4000 for c. What rate is necessary on the second investment (b) above to enable achieving the same investment result as in (a)? (2.0) 11.7 d. What payment is necessary on the first investment (a) above to enable achieving the same investment result as in (b)? (2.0) PV @ 13 Yrs

Explanation / Answer

This can be solved on excel

Time (35-22)= 13 years

PMT= 1500

Rate=11%

Using FV Function in excel

$39,317.46 (FV(B3,B1,B2,B4,))

$39,317.46

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