How much will you accumulate if you invest $1,500 per year into a retirement plan for 40 years if you can earn an annualized rate of 7.0%? (round answer)

To calculate the future value of regular investments (such as $1,500 invested annually) over time at a fixed interest rate, we can use the **Future Value of an Annuity Formula**:

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

Where:
- $FV$ = Future value
- $P$ = Annual investment ($1,500)
- $r$ = Annual interest rate (7% or 0.07)
- $t$ = Number of years (40 years)

Let's plug in the values and calculate it.

\[
FV = 1,500 \times \frac{{(1 + 0.07)^{40} - 1}}{0.07}
\]

I'll calculate this now.The future value of your investment after 40 years, with an annual contribution of $1,500 and an annualized interest rate of 7.0%, will be approximately **$299,453**.

Would you like further details or have any questions? Here are 5 related questions to consider:

1. How does changing the interest rate affect the future value?
2. What if you increase the annual contribution by a certain percentage each year?
3. How does compound interest work in retirement accounts?
4. What would the result be if the investment period was reduced to 30 years?
5. How can inflation impact the real value of your future savings?

**Tip:** Small increases in your contribution amount can significantly boost the total due to compounding interest over long periods.

Calculate the future value of a retirement investment of $1,500 per year over 40 years with an annualized rate of 7%. Understand key financial concepts like compound interest and the future value of an annuity using detailed formulas and examples.

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