Jennifer recently earned a degree in accounting and her first employment opportunity is an accountant at a major corporation. The 401(k) portion of her employment package has a personal investment cap at 20% of her salary and the employer contribution portion is 50% of her contribution. Her annual salary is $56,500 and she chose to invest 14% annually. FUTURE VALUE of $1 Periods 8 9 10 11 3% 1.267 1.305 1.344 1.384 4% 1.369 1.423 1.480 1.539 FUTURE VALUE of ANNUITY of $1 Periods 8 9 10 11 3% 8.892 10.159 11.464 12.808 4% 9.214 10.583 12.006 13.486 Required: Calculate the value of her 401(k) after 10 years at 4%, and then calculate the value of her 401(k) had she invested the maximum amount that her employer would match.
Jennifer recently earned a degree in accounting and her first employment opportunity is an accountant at a major corporation. The 401(k) portion of her employment package has a personal investment cap at 20% of her salary and the employer contribution portion is 50% of her contribution. Her annual salary is $56,500 and she chose to invest 14% annually. FUTURE VALUE of $1 Periods 8 9 10 11 3% 1.267 1.305 1.344 1.384 4% 1.369 1.423 1.480 1.539 FUTURE VALUE of ANNUITY of $1 Periods 8 9 10 11 3% 8.892 10.159 11.464 12.808 4% 9.214 10.583 12.006 13.486 Required: Calculate the value of her 401(k) after 10 years at 4%, and then calculate the value of her 401(k) had she invested the maximum amount that her employer would match.
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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Transcribed Image Text:Jennifer recently earned a degree in accounting and her first employment opportunity is an accountant at a major
corporation. The 401(k) portion of her employment package has a personal investment cap at 20% of her salary and
the employer contribution portion is 50% of her contribution. Her annual salary is $56,500 and she chose to
invest 14% annually.
FUTURE VALUE of $1
Periods
8
9
10
11
3%
1.267
1.305
1.344
1.384
4%
1.369
1.423
1.480
1.539
FUTURE VALUE of ANNUITY of $1
Periods
8
9
10
11
3%
8.892
10.159
11.464
12.808
4%
9.214
10.583
12.006
13.486
Required:
Calculate the value of her 401(k) after 10 years at 4%, and then calculate the value of her 401(k) had she invested
the maximum amount that her employer would match.
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