The balance in the account in 15 years uses the future value interest factor for a tax-exempt account (FVIFTEA). No taxes are due on the future accumulation.
FVIFTEA = (1 + R)N
FV = 125,000[FVIFTEA]
FV = 125,000[(1.11)15]
FV = 598,074
The response of €392,138 is the future accumulation for an account taxed annually. The response of €465,613 is the future accumulation for an account with tax deferred capital gains and a basis of €125,000.
