Ivana deposits $2000 annually into a Roth IRA that earns 6.85% compounded annually. Due to a change in employment, these deposits stop after 10 years, but the account continues to earn interest until Ivana retires 25 years after the last deposit is made. How much is in the account when Ivana retires?

Ivana deposits $2000 annually into a Roth IRA that earns 6.85% compounded annually. Due to a change in employment, these deposits stop after 10 years, but the account continues to earn interest until Ivana retires 25 years after the last deposit is made. How much is in the account when Ivana retires?

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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Similar questions

Lisa deposits $80,000 into an account that pays 6% interest per year, compounded annually. Scott deposits $80,000 into an account and also pays 6% per year, but it is simple interest. find the interest Lisa and Scott earn during each of the first three years. Then decide who earns more interest each year. Assume there are no withdrawals and no additional deposits.
Sam refuses to retire until his retirement account has a balance of at least $ 369,214 . Sam refuses to make any more deposits in the account. The account currently has a balance of$ 117,923 and earns 6% per year, compounded semi-annually. How long does Sam have before he will retire? You are computing number of years. Round your answer to one decimal place. For example, record 14.294 years as 14.3.
Gina deposits her inheritance into an account earning interest of 4% compounded annually. She will not withdraw the money until the balance has doubled. How long will Gina have to leave the money in the account?
Jan sold her house on December 31 and took a $50,000 mortgage as part of the payment. The 10-year mortgage has a 10% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent.$ b. How much interest was included in the first payment? Round your answer to the nearest cent.$ How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent.$
Monique contributed $500.00 every month into an RRSP for 15 years. What nominal annual rate of interest will the RRSP earn if the balance in Monique's account just after she made her last contribution was $200,000.00
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?
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 70.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 70.0 when he fully retires, he will begin to make annual withdrawals of $137,713.00 from his retirement account until he turns 90.00. After this final withdrawal, he wants $1.31 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. (ROUND TO 4 DECIMAL PLACES.)
Bob makes his first $1,500 deposit into an IRA earning 6.9% compounded annually on his 24th birthday and his last $1,500 deposit on his 36th birthday (13 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 6.9% interest compounded annually until Bob retires on his 65th birthday. How much is in the IRA when Bob retires? The amount in the IRA when Bob retires is $ (Round to the nearest cent as needed.)
Five years ago, alex loaned his son Liam $20,000 to start a business. A note was executed with an interest rate of 8%, which is the Federal rate. The note required monthly payments of the interest with the $20,000 due at the end of 10 years. Liam always made the interest payments until last year. During the current year, Liam notified his father that he was bankrupt and would not be able to repay the $20,000 or the accrued interest of $1,800. Tom is an accrual basis taxpayer whose only income is salary and interest income. The proper treatment for the nonpayment of the note is: a.$3,000 deduction. b.$20,000 deduction. c.No deduction. d.$21,800 deduction.
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.25. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 73.25 when he fully retires, he will begin to make annual withdrawals of $150, 876.06 from his retirement account until he turns 90.98. After this final withdrawal, he wants $1.81 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 7.99% interest rate.
Barb has a retirement account of $1,000,000 that earns 2% compounded monthly. If she wishes to withdraw the same amount at the end of each month for the next 25 years, how much can she withdraw?

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