Find the final amount in this retirement account, in which the rate of return on the account and the regular contribution change over time. $200 per month invested at 5%, compounded monthly, for 15 years; then $700 per month invested at 7% compounded monthly for 15 years
Find the final amount in this retirement account, in which the rate of return on the account and the regular contribution change over time. $200 per month invested at 5%, compounded monthly, for 15 years; then $700 per month invested at 7% compounded monthly for 15 years
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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Question
Find the final amount in this retirement account, in which the
Expert Solution
Step 1
We can calculate the retirement amount with the help of following formulae:
=FV (RATE, NPER,PMT)
where,
FV is the future value
Rate- Rate of Interested divided by frequency of payment (5%/12)
NPER- Number of Payment
PMT-Fixed amount
Or
A=P (1+ R/100)N
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