You just graduated from college and your new employer offers a 401(k) where they match your contribution, dollar for dollar. You want to know the accumulated balance in your 401(k), including your employer's contribution, assuming you contribute either $900 per month or $1,100 per month, and the fund earns 7.5% annually. Annual rate of return. Monthly contribution #1 Monthly contribution #2 Years to retirement Payments per year 7.5% $900 $1,100 32 12 1. Assuming you and your employer each invest $900 per month, what will be the value of your 401(k) at the end of 32 years? 2. Assuming you and your employer each invest $1,100 per month, what will be the value of your 401(k)at the end of 32 years?
You just graduated from college and your new employer offers a 401(k) where they match your contribution, dollar for dollar. You want to know the accumulated balance in your 401(k), including your employer's contribution, assuming you contribute either $900 per month or $1,100 per month, and the fund earns 7.5% annually. Annual rate of return. Monthly contribution #1 Monthly contribution #2 Years to retirement Payments per year 7.5% $900 $1,100 32 12 1. Assuming you and your employer each invest $900 per month, what will be the value of your 401(k) at the end of 32 years? 2. Assuming you and your employer each invest $1,100 per month, what will be the value of your 401(k)at the end of 32 years?
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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Transcribed Image Text:You just graduated from college and your new employer offers a 401(k) where they match your
contribution, dollar for dollar. You want to know the accumulated balance in your 401(k), including
your employer's contribution, assuming you contribute either $900 per month or $1,100 per
month, and the fund earns 7.5% annually.
Annual rate of return
Monthly contribution #1
Monthly contribution #2
Years to retirement
Payments per year
7.5%
$900
$1,100
32
12
1. Assuming you and your employer each invest $900
per month, what will be the value of your 401(k) at the
end of 32 years?
2. Assuming you and your employer each invest $1,100
per month, what will be the value of your 401(k)at the
end of 32 years?
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