You have an account that starts with $5,000. You add $500 to it each month. It earns 5.5% interest, compounded monthly. The investment will last for 34 years. Beyond the $500 you add each month, how much additional monthly payment will you need to add in order for the account to end with $1,100,000 after 34 years. Suppose you have an account that will grow to $394,000.00 in 20 years. It grows at 4.8% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $496,000.00 after 20 years. How much additional monthly contribution should they make to meet their goal?
You have an account that starts with $5,000. You add $500 to it each month. It earns 5.5% interest, compounded monthly. The investment will last for 34 years. Beyond the $500 you add each month, how much additional monthly payment will you need to add in order for the account to end with $1,100,000 after 34 years. Suppose you have an account that will grow to $394,000.00 in 20 years. It grows at 4.8% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $496,000.00 after 20 years. How much additional monthly contribution should they make to meet their goal?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You have an account that starts with $5,000. You add $500 to it each month. It earns 5.5% interest, compounded monthly. The investment will last for 34 years. Beyond the $500 you add each month, how much additional monthly payment will you need to add in order for the account to end with $1,100,000 after 34 years.
Suppose you have an account that will grow to $394,000.00 in 20 years. It grows at 4.8% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $496,000.00 after 20 years. How much additional monthly contribution should they make to meet their goal?
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