Please respond to the following scenarios as part of the Week 1: Calculating the Time Value of Money assignment. Scenario 1 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You will put $125 per month into this account starting now (at your current age). How much money will you have in this account when you retire? Scenario 2 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You put $125 per month into this account starting now (at your current age), for a 10-year period. After that, you stop contributing to this account, and the account continues to earn 8% interest. How much money will you have at age 67? Scenario 3 Assume you do not start saving now, but wait for 10 years. You will retire at 67, and earn 8% on your monthly deposits of $150. How much will you have at 67? Scenario 4 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You will put $325 per month into this account starting ten years from now. How much money will you have in this account when you retire? PA RT 1 PA RT || PV FV ² N I PMT PV FV ² N I PMT PV FV ² N PV FV N PMT PV FV N I PMT I I PMT Scenario 1 Scenario 2 Scenario 3 Scenario 4
Please respond to the following scenarios as part of the Week 1: Calculating the Time Value of Money assignment. Scenario 1 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You will put $125 per month into this account starting now (at your current age). How much money will you have in this account when you retire? Scenario 2 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You put $125 per month into this account starting now (at your current age), for a 10-year period. After that, you stop contributing to this account, and the account continues to earn 8% interest. How much money will you have at age 67? Scenario 3 Assume you do not start saving now, but wait for 10 years. You will retire at 67, and earn 8% on your monthly deposits of $150. How much will you have at 67? Scenario 4 Assume you will retire at 67. You decide to open a retirement account that earns 8% interest. You will put $325 per month into this account starting ten years from now. How much money will you have in this account when you retire? PA RT 1 PA RT || PV FV ² N I PMT PV FV ² N I PMT PV FV ² N PV FV N PMT PV FV N I PMT I I PMT Scenario 1 Scenario 2 Scenario 3 Scenario 4
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:Please respond to the following scenarios as part of the Week 1: Calculating the Time Value of Money
assignment.
Scenario 1
Assume you will retire at 67. You decide to open
a retirement account that earns 8% interest. You
will put $125 per month into this account
starting now (at your current age). How much
money will you have in this account when you
retire?
Scenario 2
Assume you will retire at 67. You decide to open
a retirement account that earns 8% interest. You
put $125 per month into this account starting
now (at your current age), for a 10-year period.
After that, you stop contributing to this account,
and the account continues to earn 8% interest.
How much money will you have at age 67?
Scenario 3
Assume you do not start saving now, but wait
for 10 years. You will retire at 67, and earn 8%
on your monthly deposits of $150. How much
will you have at 67?
Scenario 4
Assume you will retire at 67. You decide to open
a retirement account that earns 8% interest. You
will put $325 per month into this account
starting ten years from now. How much money
will you have in this account when you retire?
PA
RT
PA
RT
||
PV
FV
N
I
PMT
PV
FV
N
I
PMT
PV
FV
N
I
PMT
PV
FV
N
1
PMT
PV
FV
N
|
PMT
Scenario 1
Scenario 2
Scenario 3
Scenario 4
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