Melissa anticipates that on average the investment will earn 8% per year over the 40 years until retirement. What will be the value of Melissa’s investment if she plans on retiring in 40 years?

Melissa’s wealthy uncle gives her $10,000 as a graduation gift.

To calculate this amount, we can use the compound interest formula: A=P(1+r/n)nt where P is the principal or initial deposit, r is the annual rate of interest (in this case 8%), n represents how many times per year that interest compounds itself (usually annually), and t indicates time. We can calculate the amount using the compound interest formula: A=P (r/n+1+P)nt, where P represents the initial or principal deposit, r the interest rate per annum (in this example 8%), n the number of compoundings each year (typically annual), and finally t the time period (40 years). Plugging these numbers into our equation gives us: 10,000(1+0.08/1)^(1*40) = 110,837.72.

Therefore Melissa’s initial $10k deposit would become worth just over $110k if she were to leave it invested for 40 years and earn an average return of 8% per year as anticipated. This calculation demonstrates how investing early on can have a tremendous impact on one’s financial situation when they reach retirement age due to compounding returns over long periods of time. It also reinforces why it’s important for individuals to take advantage of any opportunity they may have to start saving for their future as soon as possible.