Huey, Dewey and Louie are triplets. They are 25 years old and are trying to set up savings plans for themselves. They plan to retire at age 65. They each have different ideas. All APR’s are 4%. Huey’s plan: deposit $100 each month into the account and leave the money in the bank until he retires at age 65. Dewey’s plan: Dewey doesn’t want to be bothered with monthly payments like Huey. He wants to hang onto his money throughout the year, and then make just one payment at the end of each year. He’ll deposit $1200 per year in his bank. He figures that at retirement his Nest Egg will be the same size as Huey’s because each year, he’s deposited just as much. Louie’s plan: Louie’s a party guy! He wants to have fun with his money while he’s young! He decides he’ll put off saving until he’s 45, at which time he’ll start putting in twice as much per month as Huey ($200). He figures with this plan, his Nest Egg ought to be the same size as Huey’s when they retire at age 65. (Twice as much for ½ the time ought to be the same, right?) (a) For each brother, you are to find/fill in the table below: # years saving, total deposits made, balance at age 65 using the TVM Solver, and the amount of interest earned. Huey Dewey Louie # years saving 40 40 20 Total amount deposited ($) Show your work here. Balance at age 65 (TVM) N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ Total Interest Earned ($) Show your work here. (b) Did all 3 brothers make the same Total Deposits? _______________
Huey, Dewey and Louie are triplets. They are 25 years old and are trying to set up savings plans for themselves. They plan to retire at age 65. They each have different ideas. All APR’s are 4%.
Huey’s plan: deposit $100 each month into the account and leave the money in the bank until he retires at age 65.
Dewey’s plan: Dewey doesn’t want to be bothered with monthly payments like Huey. He wants to hang onto his money throughout the year, and then make just one payment at the end of each year. He’ll deposit $1200 per year in his bank. He figures that at retirement his Nest Egg will be the same size as Huey’s because each year, he’s deposited just as much.
Louie’s plan: Louie’s a party guy! He wants to have fun with his money while he’s young! He decides he’ll put off saving until he’s 45, at which time he’ll start putting in twice as much per month as Huey ($200). He figures with this plan, his Nest Egg ought to be the same size as Huey’s when they retire at age 65. (Twice as much for ½ the time ought to be the same, right?)
(a) For each brother, you are to find/fill in the table below: # years saving, total deposits made, balance at age 65 using the TVM Solver, and the amount of interest earned.
|
Huey |
Dewey |
Louie |
|
|
# years saving |
40 |
40 |
20 |
|
Total amount deposited ($) Show your work here. |
|||
|
Balance at age 65 (TVM) |
N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ |
N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ |
N= I%= PV= 0 PMT= FV= P/Y= C/Y= PMT: End Balance:_________________ |
|
Total Interest Earned ($) Show your work here. |
(b) Did all 3 brothers make the same Total Deposits? _______________
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