At the end of each quarter, a 49-year-old individual puts $1400 in a retirement account that pays 9.2% interest compounded quarterly.(a) When the individual reaches age 60, what is the value of the account?(b) If no further deposits or withdrawals are made to the account, what is the value of the account when the individual reaches age 65?(a) Up to age 60, the individual's deposits form anshould be used. After age 60, the accountbecause the deposits are made at theof each period. Therefore, the formulato behave as an annuity andformula should beused.

Step 1: Step 2:The calculation involves compound interest, which means that not only the initial…

Answered: At the end of each quarter, a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 36P

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At the end of each quarter, a 50-year-old individual puts $1100 in a retirement account that pays 7.4% interest compounded quarterly. (a) When the individual reaches age 60, what is the value of the account? (b) If no further deposits or withdrawals are made to the account, what is the value of the account when the individual reaches age 65? (a) Up to age 60, the individual's deposits form an because the deposits are made at the should be used. After age 60, the account of each period. Therefore, the formula to behave as an annuity and formula should be used.
At the end of each quarter, a 52-year-old individual puts $1600 in a retirement account that pays 9.1% interest compounded quarterly. (a) When the individual reaches age 60, what is the value of the account? (b) If no further deposits or withdrawals are made to the account, what is the value of the account when the individual reaches age 65? (a) Up to age 60, the individual's deposits form an because the deposits are made at the of each period. Therefore, the formula should be used. After age 60, the account to behave as an annuity and formula should be used. When the individual reaches age 60, the value of the account will be $ (Do not round until the final answer. Then round to the nearest cent as needed.) (b) When the individual reaches age 65, the value of the account will be $. (Do not round until the final answer. Then round to the nearest cent as needed.)
An individual is 42 years old. At the end of each month, he deposits $320 in a retirement account that pays 5.42% interest compounded monthly (a) After 10 years, what is the value of the account? (b) If no further deposits or withdrawals are made to the account, what is the value of the account when the individual reaches age 65? (a) For the first 10 years, the individual's deposits form an period. Therefore, the formula behave as an annuity and formula should be used. 4 because the deposits are made at the should be used. After 10 years, the account ➤ of each to
A 45-year-old man puts $2500 in a retirement account at the end of each quarter until he reaches the age of 60, then makes no further deposits. If the account pays 6% interest compounded quarterly, how much will be in the account when the man retires at age 65?
In 2012 the maximum Social Security deposit by an individual was $8,386.75. Suppose you are 27 and make a deposit of this amount into an account at the end of each year. How much would you have (to the nearest dollar) when you retire if the account pays 2% compounded annually and you retire at age 65?_____$
An individual earns an extra $2000 each year and places this money at the end of each year into an Individual Retirement Account (IRA) in which both the original earnings and the interest in the account are not subject to taxation. If the account has an annual interest rate of 11.8% compounded annually, how much is in the account at the end of 45 years? (Round your answer to the nearest cent.)
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.)
At age 22, someone sets up an IRA (individual retirement account) with an APR of 6%. At the end of each month he deposits $55 in the account. How much will the IRA contain when he retires at age 65? Compare that amount to the total deposits made over the time period? After retirement the IRA will contain $? The total deposits made over time are $?
You have just made your first $4,500 contribution to your individual retirement account. Assume you earn an annual return of 11.3 percent and make no additional contributions. What will your account be worth when you retire in 39 years?
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At age 24, someone sets up an IRA (individual retirement account) with an APR of 4%. At the end of each month he deposits $100 in the account. How much will the IRA contain when he retires at age 65? Compare that amount to the total deposits made over the time period. After retirement the IRA will contain $ ??
A person has an individual retirement account that they contribute | . $2,150 to annually at the end of each year. The person wants to retire after making 35 annual contributions to the account. Assuming that the account earns 12% interest annually, using the Future Value of an Annuity of 1 table, compute the value of the account on the date of the final contribution (35 years from the present).

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