Gayle starts to save at age 20 for an extended vacation around the world that she will take on her 45th birthday. She will contribute $1000 each year to the account, which earns 1.65% annual interest, compounded quarterly. What is the future value of this investment when she takes her trip?

For this case we have the following equation:

P (t) = P (1 + r / n) ^ (n * t)

Where,

P: initial investment

r: interest

n: periods

t: time

she will take on her 45th birthday:

for t = 25:

P (25) = 1000 * (1 + 0.0165 / 4) ^ (4 * 25)

P (25) = 1509.31 $

Answer:

The future value of this investment when she takes her trip is:

P (25) = 1509.31 $