Answer
Amount received at age 65 after 40 year A = 87052
b). Interest = 63052
Work Step by Step
a).
Saving at age 25 per month = 50
Compound interest rate is 5.5% = 0.055
Amount received after n year A = $\frac{P [(1 + \frac{r}{n})^{n\times t} - 1]}{\frac{r}{n}}$
Amount received at age 65 after 40 year A = $\frac{50 [(1 + \frac{0.055}{12})^{12\times 40} - 1]}{\frac{0.055}{12}}$
= $50\frac{ 7.9797}{0.00458}$
= 50 $\times$ 1741= 87052
b). Interest = 87052 - (50$\times$12$\times$40) = 87052 - 24000 = 63052
