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Time value of money calculations

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Alison is currently 35 years old. On Alison's 21st birthday, she started saving $2000 per year. She made 15 annual $2000 deposits, with the last being on her 35th birthday. In other words, she contributed $30,0000. Throughout this 15-year period, she earned 8% on her savings. For the next 30 years, her money is expected to grow at 4% interest. Approximately, how much will she have in her savings account on her 65th birthday, that is, 30 years after making her last deposit? (Hint: The answer requires two time value of money calculations.)

  • $35,000
  • $55,000
  • $110,000
  • $135,000
  • $175,000

Reference no: EM131041266

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