At age 21 Julio begins saving $1,200 each year until age 35 (15 payments) in an ordinary annuity paying 5.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 years). His friend Max begins at age 41 saving $2,400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? At age 65, Julio has $ (Round to the nearest cent as needed.) in his account and Max has $ in his account.

At age 21 Julio begins saving $1,200 each year until age 35 (15 payments) in an ordinary annuity paying 5.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 years). His friend Max begins at age 41 saving $2,400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? At age 65, Julio has $ (Round to the nearest cent as needed.) in his account and Max has $ in his account.

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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Omar was given $1,000,000 on his 2nd birthday. The money is put into an account that pays 4% compounded annually. If he takes the money in 50 equal annual payments with the first when he turns 30 years old, then what is the size of each?
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What is Temporary financing?
Since he was 24 years old, Ben has been depositing $225 at the end of each month into a tax-free retirement account earning interest at the rate of 3.5%/year compounded monthly. Larry, who is the same age as Ben, decided to open a tax-free retirement account 5 years after Ben opened his. If Larry's account earns interest at the same rate as Ben's, determine how much Larry should deposit each month into his account so that both men will have the same amount of money in their accounts at age 65. (Round your answer to the nearest cent.)
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Eugene began to save for his retirement at age 35, and for 15 years he put $ 325 per month into an ordinary annuity at an annual interest rate of 8% compounded monthly. After the 15 years, Eugene was unable to make the monthly contribution of $ 325, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 15 years until he was ready to retire. How much money did he have for retirement? If Eugene had waited until he was 44 years old to start saving for retirement and then decided to put money into an ordinary annuity for 21 years earning 8% interest compounded monthly, what monthly payment would he have to make to accumulate the same amount for retirement as you found in the first part of the question?
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Heather deposited $1, 700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?

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