. Jacqueline Strauss, a 25- year- old personal loan officer at Second National Bank, under-stands the importance of starting early when it comes to saving for retirement. She has committed $ 3,000 per year for her retirement fund and assumes that she’ll retire at age 65.
a. How much will she have accumulated when she turns 65 if she invests in equities and earns 8 percent on average?

Question

. Jacqueline Strauss, a 25- year- old personal loan officer at Second National Bank, under-stands the importance of starting early when it comes to saving for retirement. She has committed $ 3,000 per year for her retirement fund and assumes that she’ll retire at age 65. 
a. How much will she have accumulated when she turns 65 if she invests in equities and earns 8 percent on average?

wolf1728 · Answer

Basically, she will be investing 3,000 per year in an annuity that yields 8% per year for 40 years. At the end of the 40 years, this will yield $839,343.12. To compute this, see the attached formula. To check to see if you did this correctly, here is an annuity calculator: http://www.1728.org/annuity.htm Good luck.