(Related to The Business of Life: Saving for Retirement) (Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $5,900 at the end of each year into a Roth IRA for the next 47 years. If you earn 7 percent compounded annually on your investment, how much will you have when you retire in 47 years? How much will you have if you wait 10 years before beginning to save and only make 37 payments into your retirement account? (Annuity payments) To pay for your child's education, you wish to have accumulated $19,000 at the end of 13 years. To do this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 12 percent compounded annually, how much must you deposit each year to obtain your goal? The amount of money you must deposit each year in order to obtain your goal is $. (Round to the nearest cent.)
(Related to The Business of Life: Saving for Retirement) (Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $5,900 at the end of each year into a Roth IRA for the next 47 years. If you earn 7 percent compounded annually on your investment, how much will you have when you retire in 47 years? How much will you have if you wait 10 years before beginning to save and only make 37 payments into your retirement account? (Annuity payments) To pay for your child's education, you wish to have accumulated $19,000 at the end of 13 years. To do this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 12 percent compounded annually, how much must you deposit each year to obtain your goal? The amount of money you must deposit each year in order to obtain your goal is $. (Round to the nearest cent.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 34P
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Ques 3 and 4
Transcribed Image Text:(Related to The Business of Life: Saving for Retirement) (Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $5,900 at the end of each year into a Roth IRA
for the next 47 years. If you earn 7 percent compounded annually on your investment, how much will you have when you retire in 47 years? How much will you have if you wait 10 years before beginning to save and only make 37 payments into your retirement account?
Transcribed Image Text:(Annuity payments) To pay for your child's education, you wish to have accumulated $19,000 at the end of 13 years. To do this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 12 percent compounded annually, how much must you deposit
each year to obtain your goal?
The amount of money you must deposit each year in order to obtain your goal is $. (Round to the nearest cent.)
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