Question# 7 A 20-year-old student wants to start saving for retirement. She plans to save $30 a day. Every day, she puts $30 in her drawer. At the end of the year, she invests the accumulated savings ($10,950) in an online stock account. The stock account has an expected annual return of 12%. 1. How much money will she have when she is 65 years old? 2. If you wait until you are 40-years-old to begin saving, and stick to the plan, how much money would you have when you retire at age 65? 3. How much must the 40-year old deposit annually to match the 20-year old's retirement fund balance?
Question# 7 A 20-year-old student wants to start saving for retirement. She plans to save $30 a day. Every day, she puts $30 in her drawer. At the end of the year, she invests the accumulated savings ($10,950) in an online stock account. The stock account has an expected annual return of 12%. 1. How much money will she have when she is 65 years old? 2. If you wait until you are 40-years-old to begin saving, and stick to the plan, how much money would you have when you retire at age 65? 3. How much must the 40-year old deposit annually to match the 20-year old's retirement fund balance?
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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Am. 111.
Transcribed Image Text:Question# 7
A 20-year-old student wants to start saving for retirement. She plans to save $30 a day.
Every day, she puts $30 in her drawer. At the end of the year, she invests the accumulated
savings ($10,950) in an online stock account. The stock account has an expected annual
return of 12%.
1. How much money will she have when she is 65 years old?
2. If you wait until you are 40-years-old to begin saving, and stick to the plan, how much
money would you have when you retire at age 65?
3. How much must the 40-year old deposit annually to match the 20-year old's retirement
fund balance?
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