Suppose that you start working for a company at age 25. You are offered two rather unlikely, but quite enticing, retirement plans from which you are allowed to choose one. [Round all answers to the nearest dollar.] Retirement plan 1: When you retire, you will receive $16,000 for each year of service. Retirement plan 2: When you start work, the company deposits $2500 into a savings account that is guaranteed to pay a yearly rate of 16%. When you retire, the account will be closed and the balance given to you. A. Determine the amount you would receive under plan 1, if you retired at age 55.

Suppose that you start working for a company at age 25. You are offered two rather unlikely, but quite enticing, retirement plans from which you are allowed to choose one. [Round all answers to the nearest dollar.] Retirement plan 1: When you retire, you will receive $16,000 for each year of service. Retirement plan 2: When you start work, the company deposits $2500 into a savings account that is guaranteed to pay a yearly rate of 16%. When you retire, the account will be closed and the balance given to you. A. Determine the amount you would receive under plan 1, if you retired at age 55.

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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a. Suppose that between the ages of 22 and 36, you contribute $9000 per year to a 401(k) and your employer contributes $4500 per year on your behalf. The interest rate is 8.5% compounded annually. What is the value of the 401(k) after 14 years? b. Suppose that after 14 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the 401(k). How much money will you have in the plan when you reach age 65? c. What is the difference between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan? Click the icon to view some finance formulas. a. The value of the 401(k) after 14 years is $ (Do not round until the final answer. Then round to the nearest dollar as needed.)
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Suppose a recent college graduate's first job allows her to deposit $200 at the end of each month in a savings plan that earns 12%, compounded monthly. This savings plan continues for 12 years before new obligations make it impossible to continue. If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 27 years after the plan began? (Round your answer to the nearest cent.) $
Suppose a recent college graduate's first job allows her to deposit $100 at the end of each month in a savings plan that earns 12%, compounded monthly. This savings plan continues for 6 years before new obligations make it impossible to continue. If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 21 years after the plan began? (Round your answer to the nearest cent.) $
show all excel formulas/ work answering the following: Saving For Retirement You are offered the opportunity to put some money away for retirement. You will receive five annual payments of $25,000 each beginning in 40 years. How much would you be willing to invest today if you desire an interest rate of 12%?
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You are 30 years old today. You want to retire at the age of 55. You expect to live until age 90. You would like to have a monthly income of $9,000 per month in retirement. How much do you have to save per month during your working years in order to achieve your retirement goal? Assume end of period payments. Assume an annual interest rate of 3.5% in retirement and 5% during your working life. How much do you have to save per month during your working years in order to achieve your retirement goal? $ (Round to the nearest cent.)

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