Question

Joshua Kelly estimates that taking some classes would result in earning $11,000 more a year for the next 40 years. Based on an annual interest rate of 7 percent, calculate the future value of these classes.

Answer 1

Answer:

The future value of these classes is $2,195,986 .

Explanation:

FV = P x [ ( ( 1 + r )^n ) - 1 ) / r ]

P = Monthly Earning = $11,000

R = RATE OF RETURN = 7%

N = NUMBER OF YEARS = 40 YEARS

P = Monthly Payment

FV = $11,000 x [ ( ( 1 + 0.07 )^40 ) - 1 ) / 0.07 ]

FV = $11,000 x [ ( ( 1.07 )^40 ) - 1 ) / 0.07 ]

FV = $11,000 x 199.635

P = $2,195,986