6.5. To be able to retire on his fiftieth birthday, a twenty-nine year old man will make consecutive equal monthly deposits P into a savings account starting on his thir- tieth birthday. Money in the savings account will earn interest at a rate of 9% pa compounded monthly. Immediately after making his last deposit on his fiftieth birthday, the man will use all the money in his savings account at that time to purchase a retirement annuity. The retirement annuity will earn interest at a rate of 12% pa compounded monthly. Calculate (rounded to the nearest cent) the value of the man's monthly deposits for each of the following retirement plans. A The retirement annuity will pay the man R1 000 every month for fifteen years.
6.5. To be able to retire on his fiftieth birthday, a twenty-nine year old man will make consecutive equal monthly deposits P into a savings account starting on his thir- tieth birthday. Money in the savings account will earn interest at a rate of 9% pa compounded monthly. Immediately after making his last deposit on his fiftieth birthday, the man will use all the money in his savings account at that time to purchase a retirement annuity. The retirement annuity will earn interest at a rate of 12% pa compounded monthly. Calculate (rounded to the nearest cent) the value of the man's monthly deposits for each of the following retirement plans. A The retirement annuity will pay the man R1 000 every month for fifteen years.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Calculate (rounded to the nearest cent) the value c
tieth birthday. Money in the savings account will earn interest at a rate of 9% pa
The retirement annuity will earn interest at a rate of 12% pa compounded monthly.
all the money in his savings account at that time to purchase a retirement annuity.
Immediately after making his last deposit on his fiftieth birthday, the man will use
consecutive equal monthly deposits P into a savings account starting on his thir-
To be able to retire on his fiftieth birthday, a twenty-nine year old man will make
6.5.1 Example
compounded monthly.
the man's monthly deposits for
each of the following retirement plans.
A The retirement annuity will pay the man R1 000 every month for fifteen years.
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