Question

1. Devon is young and has just graduated college with her associate's degree. She plans to start saving money for retirement as soon as she starts her new job. By taking 10% of her monthly gross income, Devon is able to contribute (a) $ $587 each month to a retirement plan. The account is expected to earn interest with an APR of 5.25% compounded monthly. Round answers to two decimal places. How much money will be in Devon's retirement account if she continues to make the same monthly investment for 40 years​

Answer 1

Using the future value formula, it is found that $546,148,903,191,724.25 will be in Devon's account.

What is the future value formula?

It is given by:

$V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right]$

In which:

• P is the payment.

• n is the number of payments.

• r is the interest rate.

In this problem, the parameters are as follows: P = 587, r = 0.0525, n = 40 x 12 = 480.

Hence:

$V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right]$

$V(480) = 587\left[\frac{(1 + 0.0525)^{480-1}}{0.0525}\right]$

$V(480) = 546,148,903,191,724.25$

$546,148,903,191,724.25 will be in Devon's account.

More can be learned about the future value formula at https://brainly.com/question/5025949