Akbari and her twin sister, Asghari, are celebrating their 30th birthday today. Akbari has been saving for her retirement ever since their 20th On their 20th birthday, she made a $7,000 contribution to her retirement account. Every year thereafter on their birthday, she has added another $7,000 to the account. Her plan is to continue contributing $7,000 every year on their birthday. Her 46th and final, $7,000 contribution will occur on their 65th birthday. So far, Asghari has not saved anything for her retirement but she wants to begin today. Asghari’s plan is to also contribute a fixed amount every year. Her first contribution will occur today, and her 36th, and final, contribution will occur on their 65th birthday. Assume that both investment accounts earn an annual return of 10 percent. How large does Asghari’s annual contribution have to be for her to have the same amount in her account at age 65, as Akbari will have in her account at age 65?Tariq Ahmed is 25 years old and is saving for her retirement. He is planning on making 40 contributions to her retirement account at the beginning of each of the next 40 years. The first contribution will be made today and the final contribution will be made 40 years from today. The retirement account will earn a return of 12 percent a year. If each contribution he makes is $5,000, how much will be in the retirement account 40 years from now?

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Answered: Akbari and her twin sister, Asghari,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Akbari and her twin sister, Asghari, are celebrating their 30^th birthday today. Akbari has been saving for her retirement ever since their 20^th On their 20th birthday, she made a $7,000 contribution to her retirement account. Every year thereafter on their birthday, she has added another $7,000 to the account. Her plan is to continue contributing $7,000 every year on their birthday. Her 46^th and final, $7,000 contribution will occur on their 65th birthday. So far, Asghari has not saved anything for her retirement but she wants to begin today. Asghari’s plan is to also contribute a fixed amount every year. Her first contribution will occur today, and her 36th, and final, contribution will occur on their 65th birthday. Assume that both investment accounts earn an annual return of 10 percent. How large does Asghari’s annual contribution have to be for her to have the same amount in her account at age 65, as Akbari will have in her account at age 65?
Tariq Ahmed is 25 years old and is saving for her retirement. He is planning on making 40 contributions to her retirement account at the beginning of each of the next 40 years. The first contribution will be made today and the final contribution will be made 40 years from today. The retirement account will earn a return of 12 percent a year. If each contribution he makes is $5,000, how much will be in the retirement account 40 years from now?

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