Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded weekly, on your savings. What is this offer worth to you today? O A) $39,000 OB) $42,315 Oc) $22,032 OD) $81,309
Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded weekly, on your savings. What is this offer worth to you today? O A) $39,000 OB) $42,315 Oc) $22,032 OD) $81,309
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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Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded
weekly, on your savings. What is this offer worth to you today?
O A) $39,000
OB) $42,315
Oc) $22,032
OD) $81,309
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Expert Solution
Step 1
Number of weeks (n) = 15 years x 52 weeks = 780
Weekly interest rate (i) = 8.5%/52 = 0.16346153846% = 0.0016346153846
Payments = 50
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