Question

Freya plans to invest $3,200 a year for 25 years starting at the end of this year. How much will this investment be worth at the end of the 25 years if she earns an average annual rate of return of 8.2 percent

Answer 1

Answer:

$240,885.11

Explanation:

The formula to be used is = annual payment x annuity factor

Annuity factor = {[(1+r) ^N ] - 1} / r

R = interest rate = 8.2 percent

N = number of years = 25

[(1.082^25) - 1 ] / 0.082 = 75.276598

75.276598 x $3,200 = $240,885.11

I hope my answer helps you