Day one of your job you've been tasked with a very difficult decision. What mutual fund should you select for your retirement account? There's a higher risk (higher return) fund offering 12% growth or a low risk (low return) fund offering 7% growth. Knowing you plan on working for approximately 40 years and then retire at 60, and that you feel comfortable depositing $250 a month, what is the future value of the more appealing fund?
A) $0.00
B) $1,000,000.00
C) $2,000,000.00
D) $3,941,193.13
E) $2,941,193.13
E) $2,941,193.13
Explanation: N = 40*12 = 480
I/Y = 12/12 = 1
PMT = -250.00
CPT FV = 2,941,193.13
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