Jamie is 22 years old and works for a company that matches her 401 (k) contribution up to 3%. The interest rate for her 401 (k) is 8%. If she puts away 9.5% of her $41,000 salary every year, how much would she have saved in 10 years? Round your answer to the nearest cent.

Question

Rodrigo Richards

Mathematics

3 July, 12:07

Jamie is 22 years old and works for a company that matches her 401 (k) contribution up to 3%. The interest rate for her 401 (k) is 8%. If she puts away 9.5% of her $41,000 salary every year, how much would she have saved in 10 years? Round your answer to the nearest cent.

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Answers (1)

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Joel Strickland · Answer 1

This can be solve using the formula of sinking fund method:

F = A[ ((1+i) ^n) - 1] / i

Where F is the future worth of the money

A is the amount he save every year

i is the interest rate

n is the number of years

A = 0.095 (41000) = 3895

F = 3895[ ((1+0.08) ^10) - 1] / 0.08

F = $56425.16