n you take your job, you decide to start saving for your retirement. You put P3k per year into the company’s plan, which averages 18% interest per year. Five years later, you move to another job and start a new plan. You never get around to merging the funds, if the 1st plan continued to earn interest at the rate of 18% per year for 25 years after you stopped making contributions,

n you take your job, you decide to start saving for your retirement. You put P3k per year into the company’s plan, which averages 18% interest per year. Five years later, you move to another job and start a new plan. You never get around to merging the funds, if the 1st plan continued to earn interest at the rate of 18% per year for 25 years after you stopped making contributions,

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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When you take your job, you decide to start saving for your retirement. You put $5,000/yr into the co’s plan, which averages 8% interest/yr. Five yrs later, you move to another job and start a new plan. You never get around to merging the funds, if the 1st plan continued to earn interest at the rate of 8%/yr for 35 yrs after you stopped making contributions, how much is the account worth? a. P433,698.575 b. P343,698.575 c. P433,968.575 d. P633,498.575
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