a. Suppose that between the ages of 22 and 32, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf The interestrate is 9 4% compounded annually What is the value of the 401(k) after 10 years? b. Suppose that after 10 years of working for this firm, you move on to a new jobHowever, 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 differencebetween 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 4010) after 10 years is S(Do not round until the final answer. Then round to the nearest dollar as needed )

The future value function or concept can be used to determine the future value of a present sum or…

a. Suppose that between the ages of 22 and 32, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf The interes rate is 9 4% compounded annually What is the value of the 4010) after 10 years? b. Suppose that after 10 years of working for this firm, you move on to a new job However, you koep your accumulated retirement funds in the 401(k) How much money will you have in the plan when you reach age 657 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. Suppose that between the ages of 22 and 32, you contribute $7000 per year to a 401(k) and your employer contributes $3500 per year on your behalf The interes rate is 9 4% compounded annually What is the value of the 4010) after 10 years? b. Suppose that after 10 years of working for this firm, you move on to a new job However, you koep your accumulated retirement funds in the 401(k) How much money will you have in the plan when you reach age 657 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?

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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A client, age 50, who is currently earning $100,000 per year, wishes to retire in 15 years with a fixed annual retirement income of $125,000. The client expects to live 25 years in retirement and is comfortable assuming a rate of return of 8% and inflation of 3%. What is the capital amount required at the onset of retirement to support the client’s retirement income? a) $1,441,095 b) $1,874,532 c) $2,336,367 d) $1,334,347
Your employer is now offering a matching program for employees who participate in the corporate 401(k) plan. If you contribute 6% of your gross income to the account monthly, your employer will match your contribution. If you make $4000 per month, how much will be in your account after 40 years if you can average 7% APR. A. $5,647,090.80 B. $1,259,898.25 C. $23,465.46 D. $2,823,545.40
Vijaya
43. A small business owner contributes $3000 at the end of each quarter to a retirement account that earns 8% com- pounded quarterly. (a) How long will it be until the account is worth $150,000? (b) Suppose when the account reaches $150,000, the business owner increases the contributions to $5000 at the end of each quarter. What will the total value of the account be after 15 more years?
A self-employed person deposits $3,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 8 percent. How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 40?
Your company’s pension plan earns 4.3 % interest per year, compounded quarterly. a) You would like to receive payments of $40,000 quarterly while retired. If you would like these payments paid out over 25 years, what amount of money will you need in your pension fund at the beginning of your retirement years? Give the answer correctly to 2 decimal places, and do not use the $ sign in the answer box. The money you will need at the beginning of your retirement years is Blank 1. Calculate the answer by read surrounding text. dollars. b) Use your answer from part a to help you to determine how much you should put into your pension fund quarterly during your working years to reach your retirement goals. Assume you are planning to work for 30 years. Give the answer correctly to 2 decimal places, and do not use the $ sign in the answer box. The amount you should deposit quarterly during your working years is Blank 2. Calculate the answer by read surrounding text.…
You just graduated and started your new job. Your starting salary is $50,000/year. Your employer's 401(k) plan states that your employer will contribute 3% of your salary to your 401(k) regardless of whether you make any contributions or not. They will also match your contributions, $1-for $1, up to 4% of your salary. Please answer the following questions: Assume that this annual total contribution is made for 35 years and your 401(k) earns an average annual return of 8%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or your answer will be marked as "incorrect". Also, do not add $ or commas in answer.
You have to decide whether or not to participate in the employer match program at your work. If you place 8% of your gross pay into a retirement account, your employer will match it. You plan to retire in 30 years. You expect to earn 6% return on your investment. How much will you have in the account if your average annual gross salary is $50,000? A. $316,232.80 B. $22,973.96 C. $45,947.92 D. $632,465.60 Using the same information as the previous question, assume that you want to increase your portion of the contribution to 10%. The employer will only match up to 8%. How much would you have in this situation? A. $692,523.80 B. $711,523.80 C. $316,232.80 D. $632,465.60
Assume you are 25 and earn $29 comma 00029,000 per year, never expect to receive a raise, and plan to retire at age 55. If you invest 5 percent of your salary in a 401(k) plan returning 1111 percent annually, and the company provides a $0.50 per $1.00 match on your contributions up to 3 percent of salary, what is the estimated future value of your 401(k) account? Once you retire, how much can you withdraw monthly if you want to deplete your account over 3030 years?
You have just made your first $5686 contribution to your retirement account. Assume you earn a return of 11.5 percent per year and make no additional contributions. What will your account be worth when you retire in 45 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
F2
do the follo

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