6. Calculate the future values for Dawn and Dave's investments. a. Dawn invests $2000 each year of 10 consecutive years, starting at age 25. Assume an 8% annual rate of return with annual compounding. After age 35 she no longer adds to the account, but the money continues to compound. What was Dawn's out-of-pocket amount? How much will Dawn have accumulated by age 65? b. Dave invests $2000 each year for 30 consecutive years, starting at age 35. Assume the same 8% annual rate of return with annual compounding. What was Dave's out-of-pocket amount? How much will Dave have accumulated by age 65? c. Who contributed the most out-of-pocket? Who made the most money?
6. Calculate the future values for Dawn and Dave's investments. a. Dawn invests $2000 each year of 10 consecutive years, starting at age 25. Assume an 8% annual rate of return with annual compounding. After age 35 she no longer adds to the account, but the money continues to compound. What was Dawn's out-of-pocket amount? How much will Dawn have accumulated by age 65? b. Dave invests $2000 each year for 30 consecutive years, starting at age 35. Assume the same 8% annual rate of return with annual compounding. What was Dave's out-of-pocket amount? How much will Dave have accumulated by age 65? c. Who contributed the most out-of-pocket? Who made the most money?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:**Investment Analysis for Dawn and Dave**
**6. Calculate the future values for Dawn and Dave’s investments.**
**a. Dawn's Investment Strategy:**
- Dawn invests $2000 each year for 10 consecutive years, starting at age 25.
- The investments grow at an 8% annual rate of return with annual compounding.
- After reaching age 35, Dawn stops contributing but allows the investment to grow with compounding.
- **Questions:**
- What is Dawn’s total out-of-pocket investment?
- How much will Dawn have accumulated by age 65?
**b. Dave's Investment Strategy:**
- Dave invests $2000 each year for 30 consecutive years, starting at age 35.
- The investments grow at the same 8% annual rate of return with annual compounding.
- **Questions:**
- What is Dave’s total out-of-pocket investment?
- How much will Dave have accumulated by age 65?
**c. Comparative Analysis:**
- Determine who contributed the most out-of-pocket.
- Analyze who accumulated the most money by age 65.
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