As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 4% interest compounded annually. (Round your answers to the nearest cent.) (a) 74918.11 How much (in $) would the account be worth after 10 years? $ (b)185815.21 How much (in $) would the account be worth after 20 years? $ (c)349970.01156 When you retire in 30 years, what will be the total worth (in $) of the account? $ (d) If you found a bank that paid 6% interest compounded annually rather than 4%, how much (in $) would you have in the account after 30 years? $ (e) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.
As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 4% interest compounded annually. (Round your answers to the nearest cent.) (a) 74918.11 How much (in $) would the account be worth after 10 years? $ (b)185815.21 How much (in $) would the account be worth after 20 years? $ (c)349970.01156 When you retire in 30 years, what will be the total worth (in $) of the account? $ (d) If you found a bank that paid 6% interest compounded annually rather than 4%, how much (in $) would you have in the account after 30 years? $ (e) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Find D and E
As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 4% interest compounded annually. (Round your answers to the nearest cent.)
(a) 74918.11
How much (in $) would the account be worth after 10 years?
$
(b)185815.21
How much (in $) would the account be worth after 20 years?
$
(c)349970.01156
When you retire in 30 years, what will be the total worth (in $) of the account?
$
(d)
If you found a bank that paid 6% interest compounded annually rather than 4%, how much (in $) would you have in the account after 30 years?
$
(e)
Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.
$
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