Exponential Growth Problem

Question

Edgar wants to celebrate his retirement at age 70 with a trip around the world. He estimates that he will need $100,000 to take this trip. Edgar is currently 30 years old. How much money would he need to invest today in a retirement fund paying 15% interest so that he could afford his trip? Note: Edgar is going to make one deposit into the account and let the money and interest just sit there are grow: Answer

How much money would Edgar need to deposit if he waited until he was 45 years old before he made that one deposit: Answer

Answer 1

If he invests c today, after 40 years he will have C (1.15) ^ 40 = 100000

So C = 100000/ 1.15 ^ 40 = $ 373.32

For the second part, C = 100000 / 1.15 ^ 35 = $ 750.89

Mike