BUSN 5200 F2 2022: Future Value of Multiple Annuities Assume that you contribute $200 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $400 per month for another 25 years. Given a 5 percent interest rate, what is the value of your retirement plan after 40 years?

Posted: December 23rd, 2022

Future Value of Multiple Annuities Assume that you contribute $200 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $400 per month for another 25 years. Given a 5 percent interest rate, what is the value of your retirement plan after 40 years?

$424,305.97

 

N = 40 × 12 = 480, I = 5/12 = 0.4167, PV = 0, PMT = 200, CPT FV = 305,204.03
N = 25 × 12 = 300, I = 5/12 = 0.4167, PV = 0, PMT = 200 (400 – 200), CPT FV = 119,101.94
Sum of FV = 424305.97