a. Suppose that between the ages of 22 and 30, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf. The interest rate is 8.6% compounded annually. What is the value of the 401(k) after 8 years? b. Suppose that after 8 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the 401(k). How much money will you have in the plan when you reach age 65? c. What is the difference between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan? a. The value of the 401(k) after 8 years is $ (Do not round until the final answer. Then round to the nearest dollar as needed.)
a. Suppose that between the ages of 22 and 30, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf. The interest rate is 8.6% compounded annually. What is the value of the 401(k) after 8 years? b. Suppose that after 8 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the 401(k). How much money will you have in the plan when you reach age 65? c. What is the difference between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan? a. The value of the 401(k) after 8 years is $ (Do not round until the final answer. Then round to the nearest dollar as needed.)
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:a. Suppose that between the ages of 22 and 30, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf. The interest
rate is 8.6% compounded annually. What is the value of the 401(k) after 8 years? b. Suppose that after 8 years of working for this firm, you move on to a new job.
However, you keep your accumulated retirement funds in the 401(k). How much money will you have in the plan when you reach age 65? c. What is the difference
between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan?
a. The value of the 401(k) after 8 years is $
(Do not round until the final answer. Then round to the nearest dollar as needed.)
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