Earl and Larry each begin full-time jobs in January 2009 and plan to retire in January 2057 after working for 48 years. Assume that any money they deposit into IRAs earns 6% interest compounded annually. (A) Suppose Earl opens a traditional IRA account immediately and deposits $5000 into his account at the end of each year for twelve years. After that he makes no further deposits and just lets the money earn interest. How much money will Earl have in his account when he retires in January 2057? (B) Suppose Larry waits 12 years before opening his traditional IRA and then deposits $5000 into the account at the end of each year until he retires. How much money will Larry have in his account when he retires in January 2057? (C) Who paid the most money into his IRA?
Earl and Larry each begin full-time jobs in January 2009 and plan to retire in January 2057 after working for 48 years. Assume that any money they deposit into IRAs earns 6% interest compounded annually. (A) Suppose Earl opens a traditional IRA account immediately and deposits $5000 into his account at the end of each year for twelve years. After that he makes no further deposits and just lets the money earn interest. How much money will Earl have in his account when he retires in January 2057? (B) Suppose Larry waits 12 years before opening his traditional IRA and then deposits $5000 into the account at the end of each year until he retires. How much money will Larry have in his account when he retires in January 2057? (C) Who paid the most money into his IRA?
Chapter3: Income Sources
Section: Chapter Questions
Problem 41P
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Transcribed Image Text:Earl and Larry each begin full-time jobs in January 2009 and plan to retire in
January 2057 after working for 48 years. Assume that any money they deposit
into IRAs earns 6% interest compounded annually.
(A) Suppose Earl opens a traditional IRA account immediately and deposits
$5000 into his account at the end of each year for twelve years. After that
he makes no further deposits and just lets the money earn interest. How
much money will Earl have in his account when he retires in January 2057?
(B) Suppose Larry waits 12 years before opening his traditional IRA and then
deposits $5000 into the account at the end of each year until he retires.
How much money will Larry have in his account when he retires in January
2057?
(C) Who paid the most money into his IRA?
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