Question

Can someone tell me if this is ordinary annuity of future or ordinary values sinking funds present value or what is it. The question is You are earning an average of 46500 and will retire in 10 years. If you put 20% of your gross average income in an ordinary annuity compounded at 7% annually, what will be the value of the annuity when you retire? I am using a texas instrument calculator for figuring and using formulas to do this HELP HELP

Answer 1

You put in P = 9,300 per year for n = 10 years at interest rate r = .07
You can do this as a future value of annuity or amount of a sinking fund. N is accumulated after n years.
N = P * [(1+r)^n - 1 ] / r

N = 9300 * [ (1.07)^10 - 1 ] / .07

N = 128,493

Answer 2

With my TI 83 + calculator:
type 9300
type * times key x
left paren
1.07^10 -1
right paren
enter
get 8994.5...
divide key
.07
enter
get
128492.966

Answer 3

that is what i was wondering if i had to figure out the from the 46500 the 20 percent and use that thanks