Question

10. You are depositing the $13,000 into your 401K plan per year. If you plan to work for 20 more years, how much will you have in your account if it pays 6% annually.

Answer 1

use the formula for compound interest

Answer 2

P= 13,000
r=0.06
t=20
n=1

Answer 3

Are you depositing at the beginning of each year or at the end of each year. This is an annuity problem and is the difference between an annuity-due and an annuity-immediate (actuarial and financial terms). @comeasyouare15

Answer 4

If you are depositing at the beginning of each year (annuity-due), you have 20 deposits of 13,000 with an interest rate of 6% with interest and principal factor of 1.06. Call this 1.06 "x" :

13000(x^20 + x^19 + x^18 + . . . + x^3 + x^2 + x)

13000(x)(x^19 + x^18 + x^17 + . . . + x^2 + x + 1)

13000(x)(x^20 - 1)/(x - 1)

Just substitute 1.06 for x and simplify. Or, you could have just used a financial calculator, but annuity problems are too easy for a financial calculator a lot of times. This is one of those times.

Answer 5

All good now, @comeasyouare15 ?

Answer 6

Should be about 506905.47 but it depends on the rounding.

Answer 7

i dont know about anuallity problem
i think it is a compound interest problem but it is posible that i coulb be worng

Answer 8

It would be a compound interest problem if there were one deposit, but here we have deposits every year.

Answer 9

thank you ! @tcaroll010 and @julian25

Answer 10

yeah I was about to do that lol!

Answer 11

:-)

Answer 12

Good luck to you in all of your studies and thx for the recognition! @comeasyouare15

Answer 13

no thank you!