John graduates from college at the age of 25. He places $5,000 in a 401k at the beginning of year one, $8,000 at
the beginning of year two, $11,000 at the beginning of year three, $14,000 at the beginning of year four, and
then $15,000 per year
until he retires at the age of 60. If money earns 8 percent per year, how much will John
have in his retirement account at age 60?
Retiremen
t Age
Annual
Interest
60 8.00%
Age Years to
Retirement
Investmen
t
FVF Future Value
25 35 $5,000.00 14.7853 $ 73,926.72
26 34 8,000.00 13.6901 109,521.07
27 33 11,000.00 12.6760 139,436.55
28 32 14,000.00 11.7371 164,319.16
29 31 15,000.00 133.2135 1,998,203.06
401k Total
=
$2,485,406.56
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