Question

Mark Johnson invests a fixed percentage of his salary at the end of each year. This year he invested $1500 For the next 5 years, he expects his salary to increase 8% annually, and he plans to increase his savings at the same rate. How much will the investments be worth at the end of 6 years if the average increase in the stock market is (a) 8% (b) 5%(c) 3%

Answer 1

Answer:

Mark Johnson's investment would worth $ 13,223.95  at 8%,$ 12,338.93  

at 5% and $ 11,784.66  at 3%

Explanation:

In calculating the worth of the investments at different rates of interest I adopted the future value approach as contained in the attached.