math question..... need help?

Question

beggining at age 18, if you save 3000 per yr for 5 years and earned a return of 10% each year at 65 how much money would you have?

I have 4 possible answers.

what I meant by 4 possible answers is,
A) 55,000
B) 165,000
C) 460,000
D) Over 1 million

I have tried several different ways and I still can't find the answer.

Answer 1

Assuming you put $3000 in at the beginning of each year, and then your money gains 10% interest at the end of each year, after 5 years, you'd have...

Year 1
$3000 * 1.1 = $3300

Year 2
($3300 + $3000) * 1.1 = $6930

Year 3
($6930 + $3000) * 1.1 = $10923

Year 4
($10923 + $3000) * 1.1 = $15315.30

Year 5
($15315.30 + $3000) * 1.1 = $20146.80

I'm assuming after 5 years, you stop saving money, but you keep getting interest. You'd be 23 after 5 years, so you'd have 42 more years of interest. Therefore, you have to multiply your total by (1.1)^42:

$20146.80 * (1.1)^42
= $20146.80 * 54.7637
= $1,103,313.30

Answer 2

No you have only one possible answer.
Find out how much an annual investment of 5000$ become at 10% interest call this amount M. then find out how much M will become at 10% interest after 42 years.

Answer 3

FV = 3000(1.1)^47
FV = 3000*88.197485 = $264,592.46