Sydney saved $10,000 during her first year of work after college and plans to invest it for her retirement in 40 years

Sydney saved $10,000 during her first year of work after college and plans to invest it for her retirement in 40 years. How much will she have available for retirement if she can make 8% on her investment?

A. $596,250
B. $2,953,000
C. $1,345,100
D. $469,020

FV = PV x FV_IF (App. A: 8%, 40 periods)
= $10,000 x 46.902 = $469,020

Luke believes that he can invest $5,000 per year for his retirement in 30 years. How much will he have available for retirement if he can earn 8% on his investment?

A. $566,400
B. $681,550
C. $150,000
D. $162,000

FV_A = A ´FV_IFA (App. C: 8%, 30 periods)
= $5,000 ´ 113.28 = $566,400

Ian would like to save $2,000,000 by the time he retires in 40 years. If he believes that he can achieve a 7% rate of return, how much does he need to deposit each year to achieve his goal?

A. $12,065
B. $37,500
C. $5,790
D. $10,018

(App. C: 7%, 40 periods)
= $2,000,000 = $10,018
199.64