Assume that you contribute $390 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $780 per month for another 25 years. Given a 6 percent interest rate,...

Assume that you contribute $390 per month to a retirement plan for 15 years. Then you are able to
increase the contribution to $780 per month for another 25 years. Given a 6 percent interest rate, what
is the value of your retirement plan after the 40 years?
Solution:
Annual interest rate = 6%
Monthly interest rate = 06% / 12 = 0.5%
1. FV (after 40 years) of contribution for first 15 years
FV of annuity = P*[(1+r)^n-1/r]
Here,
P = 390
r= 0.5%
n = 15*12 = 180
FV of annuity =...