To calculate the amount LeBron has saved by the time he retires at age 68, we can use the future value formula for regular monthly deposits:
FV = Pmt * [(1 + r)^n - 1] / r
Where:
Pmt = monthly deposit amount = $850
r = monthly interest rate = 7.5% / 12 = 0.00625
n = total number of deposits = (68 - 33) * 12 = 420
Plugging in the values:
FV = $850 * [(1 + 0.00625)^420 - 1] / 0.00625
FV = $1,726,148
Therefore, LeBron has saved $1,726,148 by the time he retires at age 68.
So, the correct answer is:
$1,726,148
LeBron starts saving for retirement at age 33. If he deposits $850 each month in an account that pays 7.5% interest, how much has LeBron saved by the time he retires at age 68?
$361,715
$11,638
$1,726,148
$357,000
$126,067
1 answer