Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first 10 years, she contributes $266 per month. She increases the contribution rate to $432.67 per month in years 11 through 20. This is followed by increases to $849.33 per month in years 21 through 30 and to $1,266 per month for the last 10 years. This money earns a 6 percent return. First compute the value of the retirement plan when she turns age 65. Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 3 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Answer is complete but not entirely correct. Value of retirement assets Monthly payment $ $ 1,242,792.91 37,699.39 x
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first 10 years, she contributes $266 per month. She increases the contribution rate to $432.67 per month in years 11 through 20. This is followed by increases to $849.33 per month in years 21 through 30 and to $1,266 per month for the last 10 years. This money earns a 6 percent return. First compute the value of the retirement plan when she turns age 65. Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 3 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Answer is complete but not entirely correct. Value of retirement assets Monthly payment $ $ 1,242,792.91 37,699.39 x
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 15E
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Transcribed Image Text:Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For
the first 10 years, she contributes $266 per month. She increases the contribution rate to $432.67 per month in years 11 through 20.
This is followed by increases to $849.33 per month in years 21 through 30 and to $1,266 per month for the last 10 years. This money
earns a 6 percent return.
First compute the value of the retirement plan when she turns age 65.
Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 3
percent.
Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
Answer is complete but not entirely correct.
Value of retirement assets
Monthly payment
$
$
1,242,792.91
37,699.39 x
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