If a person starts investing $100 per month starting at age 21, and that money earns a 7% return every year, how much will this person have when turning 70 years old? for ease of calculation, assume starting balance of $0 and annual contributions of $1,200 (12*$100).

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Business

Aaron Russell

2 August, 16:23

If a person starts investing $100 per month starting at age 21, and that money earns a 7% return every year, how much will this person have when turning 70 years old? for ease of calculation, assume starting balance of $0 and annual contributions of $1,200 (12*$100).

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Adriel Duncan · Answer 1

The future worth of money with the investment made every year can be calculated through the equation,

F = A x ((1 + r) ^n - 1 / (r))

Substituting the known values,

F = ($1200) x ((1 + 0.07) ^49 - 1) / (0.07))

F = $454,798.8

Hence, the future worth of the made contribution is $454,798.8.