Leo is 23 years old and works for a company that matches his 401 (k contribution up to 4.6%. the interest rate for his 401 (k is 5.32%. if he puts away 8% of his $65,000 salary every year, how much would he have saved in 10 years? round your answer to the nearest cent.

Question

Riley Guerra

Business

4 October, 05:53

Leo is 23 years old and works for a company that matches his 401 (k contribution up to 4.6%. the interest rate for his 401 (k is 5.32%. if he puts away 8% of his $65,000 salary every year, how much would he have saved in 10 years? round your answer to the nearest cent.

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Adolfo Montes · Answer 1

The solution would be like this for this specific problem:

Fv = pmt [ (1+r) ^ (t) - 1) : r]

65,000 * 0.046=2,990

65,000 * 0.08=5,200

Fv = 5,200 * (((1+0.0532) ^ (10) - 1) : (0.0532)) = 66,390.27

F v = 2,990 * (((1+0.0532) ^ (10) - 1) : (0.0532)) = 38,174.40

38,174.40 + 66,390.27 = 104,564.67

If he puts away 8% of his $65,000 salary every year, he would have saved $104,564.67 in 10 years.