Time Value of Money

"Time Value of Money"
SOLUTION STRATEGY
STEPS:
1. Draw a time line
2. Identify the values:
a. Present value
b. Interim payments (ordinary annuity/annuity due)
c. Future value
d. Discount rate/Interest rate / Required rate of return
e. Period of investment
3. Use your financial calculators for computation
QUESTION:
Ms. Early Saver has decided to invest $1,000 at the end of each year for the next 10 years, and then she will just let the amount compound for 40 additional years. Her brother, Late Saver, has a different investment program: He will invest nothing for the next 10 years, but will invest $1,000 per year (at the end of each year) for the following 40 years. If we assume an 8 percent rate of return, compounded annually, which investment program will be worth more 50 years from now? 
Calculate the value of the investment if Ms. Early Saver and her brother, Late Saver, make the $1000 investment per year in the beginning of each year.