14. In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. An individual retirement account, or IRA, earns tax-deferred interest and allows the owner to invest up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.1%. Joe deposits $5000 once each year, while Jill has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited automatically. How much will each have at age 65? (Round your answer to the nearest cent.) Joe $ Jill $

14. In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. An individual retirement account, or IRA, earns tax-deferred interest and allows the owner to invest up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.1%. Joe deposits $5000 once each year, while Jill has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited automatically. How much will each have at age 65? (Round your answer to the nearest cent.) Joe $ Jill $

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 15E

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In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.An individual retirement account, or IRA, earns tax-deferred interest and allows the owner to invest up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.8%. Joe deposits $5000 once each year, while Jill has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited automatically. How much will each have at age 65? (Round your answer to the nearest cent.) Joe $ Jill $
Many persons prepare for retirement by making monthly contributions to a savings program. Suppose that $2,500 is set aside each year and invested in a savings account that pays 8% interest per year, compounded continuously. a. Determine the accumulated savings in this account at the end of 29 years. b. In Part (a), suppose that an annuity will be withdrawn from savings that have been accumulated at the EOY 29. The annuity will extend from the EOY 30 to the EOY 36. What is the value of this annuity if the interest rate and compounding frequency in Part (a) do not change? Click the icon to view the interest and annuity table for continuous compounding when i=8% per year. a. The accumulated savings amount at the end of 29 years will be $275384. (Round to the nearest dollar.) b. The value of the annuity will be $41655. (Round to the nearest dollar.)
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. You and your new spouse each bring home $1600 each month after taxes and other payroll deductions. By living frugally, you intend to live on just one paycheck and save the other in a mutual fund yielding 7.74% compounded monthly. How long will it take to have enough for a 20% down payment on a $175,000 condo in the city? (Round your answer to two decimal places.)
Lydia deposits $900 at the end of each year for 9 years in a savings account. The account pays 8% interest, compounded annually. Lydia calculates that the future value of the ordinary annuity is $11,238.80. What would be the future value if deposits are made at the beginning of each period rather than the end?
At the beginning of each period for 11 years, Bobby Nelson invests $470 semiannually at 4%, compounded semiannually. What is the cash value of this annuity due at the end of year 11?
Sam deposits $800 at the end of every 6 months in an account that pays 7%, compounded semiannually. How much will he have at the end of 9 years? (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.)
An individual earns an extra $1000 each year and places this money at the end of each year into an Individual Retirement Account (IRA) in which both the original earnings and the interest in the account are not subject to taxation. If the account has an annual interest rate of 7.5% compounded annually, how much is in the account at the end of 50 years? (Round your answer to the nearest cent.)
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9. Daniel Plans to fund his individual retirement account, beginning at the end of each year with 20 annual deposits of P2,000, which will continue for the next 20 years. If he can earn an annual compound interest rate of 8 percent on his deposits, what will be the amount in the account upon retirement?
At the beginning of each period for 11 years, Merl Agnes invests $410 semiannually at 4%. What is the cash value of this annuity due at the end of year 11? (Do not round intermediate calculations. Round your answer to the nearest cent.
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Joel makes regular (end of term) deposits into his RRSP (Registered Retirement Savings Plan) that will be converted into an RRIF (Registered Retirement Income Fund) 20 years from now. During retirement Joel would like to receive $5,400 at the end of every six months for 22 years. If interest is 3.28% compounded semi-annually (for both the RRSP and RRIF). Answer the following questions, and round all answers to two decimal places where necessary. 1) How much money should Joel have in his RRIF to receive payments of $5,400 at the end of every six months? P/Y= PV = $ esc P/Y = PV = $ Submit Question 1 2) What payment will Joel have to make at the end of every six months into his RRSP so that there is enough money in his RRIF at the start of his retirement? Q A N C/Y= FI PMT= $ C/Y= PMT= $ 2 W S * X #3 80 F3 E N= D N= FV = $ FV = $ $ 4 Q F4 R LL I/Y = F I/Y = do 5 % T G 6 % % F6 Y & 7 H F7 U 00 * 8 DII FB ( 09 O