Question

Lucas invests $2000 per year in his retirement account for 40 years in an investment with an average annual return of 10%. Approximately how much will he have after 40 years

Answer 1

If Lucas invests $2,000 yearly for 40 years with annual return of 10%, he will have $885,185.

Data and Calculations:

N (# of periods) = 40 years

I/Y (Interest per year) = 10%

PV (Present Value) = $0

PMT (Periodic Payment) = $2,000

Results:

FV (Future Value) = $885,185.11

Sum of all periodic payments = $80,000 ($2,000 x 40)

Total Interest= $805,185.11

Thus, approximately, Lucas will have $885,185 in his retirement account after 40 years.

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