You are advising a co-worker on saving for retirement. Theco-worker gives you two possible scenarios:
Scenario 1: Suppose you invest $170 a month for 6 yearsinto an account earning 10% compounded monthly. After 6 years, youleave the money, without making additional deposits, in the accountfor another 22 years. How much will you have in the end?
Scenario 2: Suppose instead you didn't invest anything forthe first 6 years, then deposited $170 a month for 22 years into anaccount earning 10% compounded monthly. How much will you have inthe end?
Include the following in a report.
- What is the future value of each scenario?
- What is the total amount invested for each scenario?
- What is the total interest earned for each investment?
- How many more monthly deposits would you need to make for thefirst scenario to have the same future value as the secondscenario?
- How many more monthly deposits would you need to make for thesecond scenario to have the same total interest as the firstscenario?
