Question

Lulu opened an investment account today with an initial investment of $50,000. She is going to...

Lulu opened an investment account today with an initial investment of $50,000. She is going to then invest $8,000 a year for 30 years, starting a year from today. How much will she be able to withdraw in 30 years if she earns 6% annual interest?

rate=

nper=

pmt=

pv=

type=

FV=

please also show formulas used in order to get answer

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Answer #1

Ans:- In this question, we need to find the Future Value (FV). we will use the FV function of excel to find the answer.

Rate=6%, Nper = 30, Pmt = -$8,000, PV=-$50,000, TYPE = 0, FV=?

Nper is the number of periods, Pmt is the periodic deposit. PV is the initial investment.

In the FV function of excel, we put TYPE = 0 in case of ordinary annuity and TYPE=1 in case of an annuity due. In this case, we have put TYPE=0 because this is a case of an ordinary annuity.

Therefore, the FV after 30 years will be $919,640.05.

Note:- If this answer helps you pls give thumbs up.

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