Question

I selected the target fund retirement 2065(3-yr) and the average
annual return I will use is **7.25%**

If you invest the amount you are saving every
year(**$1,092.00**) on this fund, for the next
**10 years**, how much will you have when you reach
**65(21 today)**?

I will have $___________ when I reach 65.

**CALCULATIONS:** I applied the **Future
Value of Annuity Formula and FV formula (I'm not sure)** to
solve it, with the following inputs:

Answer #1

- Periodic annual annuity for 10 years = $1092

After 10 years, only Interest will accumulate till you reach your age 65.

In Calculating Future Value at year end 65 we will use FV of ordinary annuity formula for periodic annuity and then compound the resultant till age 65:-

Where, C= Periodic Payments = $1092

r = Periodic Interest rate = 7.25%

n= no of periods of annuity = 10 years

m = no of years of Interest compounding = (65 years - 21 years -10 years) = 34 years

**Future Value = $164,914.59**

So, amount you will have when you reach **65 is
$164,914.59**

*If you need any clarification, you can ask in
comments. *

**If you like my answer, then please up-vote as it
will be motivating *** *

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