Question

Find the final amount in the following retirement? account, in which the rate of return on the account and the regular contribution change over time.

?$645 per month invested at 5?%, compounded? monthly, for 7 ?years; then ?$793 per month invested at 6?%, compounded? monthly, for 7 years.

What is the amount in the account after 14 years?

Answer 1

The retirement amount depends on the sum contributed and rate of interest. Sum is contributed in compound interest format

so,

as $645 per month invested at 5% compounded monthly for 7 years - in this case using compound interest formula - amount will be $64981.61

as $793 per month invested at 6% compounded monthly for 7 years - in this case using compound interest formula - amount will be $82943.28

so, total sum after 14 years at retirement would be - $ 147924.89