Question

money planning
part 3 of 3 1 2 3 trying to earn:
mel hill is 34 years old and has $6000 in savings. he can either

1. put his money in a no - interest checking account (that is, has 0% return),
2. put it in a savings account and earn 3.5% annual interest, or
3. put it into a retirement account of stocks and bonds earning 7% annual gains

the following graph shows the value of the three different accounts at various times.
(graph: value of account at different interest rates, with axes years (0 - 30) and value ($0,000 - $50,000), and three lines: no - interest (0%) (red), 3.5% savings (blue), 7% retirement (black))
question 1: 20 years from now, mel will be 54. at that time, how much more would his $6000 investment be worth if mel put this money in the retirement account (7%) instead of keeping this money in a savings account (3.5%)?
your answer should be within $2000 of the exact amount. $

Explanation:

Step1: Find 20-yr retirement value

From graph, 7% retirement at 20 yrs = $\$22,000$

Step2: Find 20-yr savings value

From graph, 3.5% savings at 20 yrs = $\$12,000$

Step3: Calculate the difference

$\$22,000 - \$12,000 = \$10,000$

Answer:

$\$10,000$