(a) The compounded future value of Amy's 401(k) plan is $ 64517.763 million. (Round to three decimal places.) (b) What will be the compounded future value if the plan earns an annual interest rate of 4% per year (instead of 7% per year) ? $31554.128 million. (Round to three decimal places.)
(a) The compounded future value of Amy's 401(k) plan is $ 64517.763 million. (Round to three decimal places.) (b) What will be the compounded future value if the plan earns an annual interest rate of 4% per year (instead of 7% per year) ? $31554.128 million. (Round to three decimal places.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Ab 54
Economics
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![Amy Parker, a 22-year-old and newly hired marine biologist, has opened a 401(k) retirement plan with
her employer. Amy's contribution, plus that of her employer, amounts to $2,100 per year starting at age
23. Amy expects this amount to increase by 4% each year until she retires at the age of 67 (there will be
45 EOY payments). What is the compounded future value of Amy's 401(k) plan, in millions of $, if it
earns an annual interest rate of 7% per year?
(a) The compounded future value of Amy's 401(k) plan is $ 64517.763 million. (Round to three
decimal places.)
(b) What will be the compounded future value if the plan earns an annual interest rate of 4% per
year (instead of 7% per year)? $ 31554.128 million. (Round to three decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2a39ead3-bc46-40d5-97e4-8f7630fa8073%2F381fdfce-b85b-49a0-8fda-8f905a91f235%2F5qahjeq_processed.png&w=3840&q=75)
Transcribed Image Text:Amy Parker, a 22-year-old and newly hired marine biologist, has opened a 401(k) retirement plan with
her employer. Amy's contribution, plus that of her employer, amounts to $2,100 per year starting at age
23. Amy expects this amount to increase by 4% each year until she retires at the age of 67 (there will be
45 EOY payments). What is the compounded future value of Amy's 401(k) plan, in millions of $, if it
earns an annual interest rate of 7% per year?
(a) The compounded future value of Amy's 401(k) plan is $ 64517.763 million. (Round to three
decimal places.)
(b) What will be the compounded future value if the plan earns an annual interest rate of 4% per
year (instead of 7% per year)? $ 31554.128 million. (Round to three decimal places.)
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