To save for her newborn son's college education, Lea Wilson will invest $1,440 at the end of each year for the next 34 years. The interest rate is 10%. What is the future value?

To calculate the future value of an investment where regular payments are made at the end of each period (known as an ordinary annuity), we use the **Future Value of an Ordinary Annuity formula**:

\[
FV = P \times \frac{(1 + r)^n - 1}{r}
\]

Where:
- $ FV $ is the future value.
- $ P $ is the payment amount ($1,440).
- $ r $ is the interest rate per period (10% = 0.10).
- $ n $ is the total number of periods (34 years).

Let’s compute:

\[
FV = 1,440 \times \frac{(1 + 0.10)^{34} - 1}{0.10}
\]

Now, let's calculate the future value.The future value of Lea Wilson's investment, where she deposits $1,440 at the end of each year for 34 years at an interest rate of 10%, will be approximately **$353,486.45**.

Would you like more details on how this was calculated or have any questions?

Here are 5 related questions you might find interesting:
1. How would the future value change if the interest rate were lower, say 8%?
2. What is the impact of investing semi-annually instead of annually?
3. How would the future value differ if she started investing at the beginning of each year instead of the end?
4. What happens if the investment duration is reduced to 30 years instead of 34?
5. How much interest will she earn compared to the total amount she invested?

**Tip:** Starting earlier with investments or increasing the contribution amount can greatly increase future returns due to the power of compounding.

To save for her newborn son's college education, Lea Wilson will invest $1,440 at the end of each year for the next 34 years. The interest rate is 10%. What is the future value?

Calculate the future value of Lea Wilson's investment for her son's college education. She will invest $1,440 annually for 34 years at an interest rate of 10%. Learn how to apply the Future Value of an Ordinary Annuity formula and understand key financial concepts such as compound interest and annuities. Suitable for high school students (Grades 10-12).

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