To determine which savings period will result in the largest future amount when you retire at age 67, we need to calculate the future value of each savings period.

Let's start with the first option: saving $2,000 a year from age 47 to age 67. To calculate the future value, we need to know the rate of return or interest rate. Assuming any positive rate of return, let's use a hypothetical rate of 5%.

Using a future value formula, we can calculate the future amount for this savings period. The formula is:

Future Value = Present Value * (1 + Interest Rate)^Number of Periods

In this case, the present value is $2,000, the interest rate is 5%, and the number of periods is 20 (from age 47 to age 67). Plugging these values into the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $78,286.

Now let's move on to the second option: saving $2,000 a year from age 42 to age 62. Using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $92,407.

Finally, let's consider the third option: saving $2,000 a year from age 22 to age 42. Again, using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $160,357.

Comparing the future values of each savings period, we can see that saving $2,000 a year from age 22 to age 42 results in the largest future amount when you retire at age 67. Therefore, this is the savings period that will give you the largest future amount.

Question

To determine which savings period will result in the largest future amount when you retire at age 67, we need to calculate the future value of each savings period.

Let's start with the first option: saving $2,000 a year from age 47 to age 67. To calculate the future value, we need to know the rate of return or interest rate. Assuming any positive rate of return, let's use a hypothetical rate of 5%.

Using a future value formula, we can calculate the future amount for this savings period. The formula is:

Future Value = Present Value * (1 + Interest Rate)^Number of Periods

In this case, the present value is $2,000, the interest rate is 5%, and the number of periods is 20 (from age 47 to age 67). Plugging these values into the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $78,286.

Now let's move on to the second option: saving $2,000 a year from age 42 to age 62. Using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $92,407.

Finally, let's consider the third option: saving $2,000 a year from age 22 to age 42. Again, using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $160,357.

Comparing the future values of each savings period, we can see that saving $2,000 a year from age 22 to age 42 results in the largest future amount when you retire at age 67. Therefore, this is the savings period that will give you the largest future amount.

Knowee AI · Accepted Answer

To determine which savings period will result in the largest future amount when you retire at age 67, we need to calculate the future value of each savings period.

Let's start with the first option: saving $2,000 a year from age 47 to age 67. To calculate the future value, we need to know the rate of return or interest rate. Assuming any positive rate of return, let's use a hypothetical rate of 5%.

Using a future value formula, we can calculate the future amount for this savings period. The formula is:

Future Value = Present Value * (1 + Interest Rate)^Number of Periods

In this case, the present value is $2,000, the interest rate is 5%, and the number of periods is 20 (from age 47 to age 67). Plugging these values into the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $78,286.

Now let's move on to the second option: saving $2,000 a year from age 42 to age 62. Using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $92,407.

Finally, let's consider the third option: saving $2,000 a year from age 22 to age 42. Again, using the same interest rate of 5% and applying the formula, we get:

Future Value = $2,000 * (1 + 0.05)^20

Calculating this, the future value for this savings period is approximately $160,357.

Comparing the future values of each savings period, we can see that saving $2,000 a year from age 22 to age 42 results in the largest future amount when you retire at age 67. Therefore, this is the savings period that will give you the largest future amount.

Which of these savings periods will result in the largest future amount when you retire at age 67, assuming any positive rate of return?ANSWERSave $2,000 a year from age 47 to age 67.Save $2,000 a year from age 42 to age 62.Save $2,000 a year from age 22 to age 42.

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