SHaylda, age 22. just started Wolking full-time and plans to deposit $6,000 annually into an IRA earning 10 percent interest compounded annually How much would she have in 20 years, 30 years, and 40 years? If she changed her investment period and in invested $500 00 monthly, and the investment also changed to monthly compounding, how much would she have after the same three time periods? Comment on the differences over time Click the table icon to view the future value annuity table With annual investments and compounding, after 20 years, Shaylea would have $ 343650. (Round to the nearest cent.) With annual investments and compounding, after 30 years, Shaylea would have $ 986964.15. (Round to the nearest cent) With annual investments and compounding, after 40 years, Shaylea would have S 2655555 33 (Round to the nearest cent) With monthly investments and monthly compounding interest, after 20 years, Shaylea would have S (Roung to the nearest cent)
SHaylda, age 22. just started Wolking full-time and plans to deposit $6,000 annually into an IRA earning 10 percent interest compounded annually How much would she have in 20 years, 30 years, and 40 years? If she changed her investment period and in invested $500 00 monthly, and the investment also changed to monthly compounding, how much would she have after the same three time periods? Comment on the differences over time Click the table icon to view the future value annuity table With annual investments and compounding, after 20 years, Shaylea would have $ 343650. (Round to the nearest cent.) With annual investments and compounding, after 30 years, Shaylea would have $ 986964.15. (Round to the nearest cent) With annual investments and compounding, after 40 years, Shaylea would have S 2655555 33 (Round to the nearest cent) With monthly investments and monthly compounding interest, after 20 years, Shaylea would have S (Roung to the nearest cent)
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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Question
Trying to figure monthly compounding after 20 years
Transcribed Image Text:**Scenario Analysis: Future Value of Annuity Investment**
*Context:*
Shaylea, age 22, has commenced full-time employment and is planning to invest $6,000 annually into an Individual Retirement Account (IRA) with an annual compounding interest rate of 10 percent. Additionally, she might decide to invest $500 monthly, with changes in compounding frequency. The question investigates her financial growth over 20, 30, and 40 years under different investment strategies.
*Analysis:*
1. **Annual Investments with Annual Compounding:**
- After 20 years, Shaylea's investment would grow to $343,650.
- After 30 years, the investment would increase to $986,964.15.
- After 40 years, the investment would reach $2,655,555.33.
2. **Monthly Investments with Monthly Compounding:**
- After 20 years, with monthly investments and compounding, she would accumulate $ (amount not visible).
*Instructions:*
To understand the impact of compounding and investment frequency, click the table icon to view detailed data (typically a future value annuity table).
*Interactive Component:*
Enter your answers in the provided answer box and click "Check Answer" for verification.
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*Note:* The scenario illustrates the significant impact of both the investment horizon and the frequency of contributions and compounding on investment outcomes. Monthly contributions and compounding would likely lead to a higher final amount due to more frequent application of interest.
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