financial planning problemDetermining the future value of education. J

QUESTION

financial planning problemDetermining the future value of education. Jenny estimatesthat as a result of completing her masters degree, she will earn$6,000 a year for the next 40 years.What would be the future value of these additional earningsbased on an annual interest rate of 6%
Annual Interest rate 6% Annual earnings $6,000 Number of years 40 years CalculatingFuture Value of earnings (FV) (UsingMs-Excel “FV” Function): Annual Interest rate(Rate) 6% Number of Periods(Nper) 40 years Annual Earnings Amount(PMT) -$6,000 FutureValue of earnings (FV) $928,571.79 ( OR) FV = C * [(1 r) t 1] / r FV = $6,000 * [(1

0.06) 40 1] / 0.06 FV = $6,000 * [10.2857 1] /0.06 FV = $6,000 * (9.2857 / 0.06) FV = $6,000 * 154.7617 FV = $928,570.20 ( OR) AnnualEarnings Amount * FVIFA (6%,40) FutureValue of earnings = $6,000 * 154.76 $928,560.00

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