At the age of 24, to save for retirement, you decide to deposit $80 at the end ofeach month in an IRA that pays 5% compounded monthly.a. You will have approximately S in the IRA when you retire.(Do not round until the final answer. Then round to the nearest dollar as needed.)Use the following formula to determine how much you will have in the IRAwhen you retire at age 65.a.P[(1 + n* - 1]A=ornt- 1A =b.Find the interest.

At the age of 24, to save for retirement, you decide to deposit $80 at the end of each month in an IRA that pays 5% compounded monthly. Use the following formula to determine how much you will have in the IRA when you retire at age 65. a. P[(1 +n* - 1] A = or nt A = b. Find the interest.

At the age of 24, to save for retirement, you decide to deposit $80 at the end of each month in an IRA that pays 5% compounded monthly. Use the following formula to determine how much you will have in the IRA when you retire at age 65. a. P[(1 +n* - 1] A = or nt A = b. Find the interest.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

See similar textbooks

Related questions

Q: At the age of 24, you start depositing $200 each month into an IRA that pays 3.75% interest,…

A: In the question, amount is deposited every month so it is the question of annuity. Annuity is the…

Q: You are to make monthly deposits of $725 into a retirememt account that pays an APR of 10.1 percemt…

A: Future value is the expected value of current regular deposit at a future date, at a given rate of…

Q: How much should you deposit at the end of each month in an IRA that pays 6% compounded monthly to…

A: PV is the current worth of cash flows that are expected to happen in the future.

Q: At age 25, to save for retirement, you decide to deposit $50 at the end of each month in an IRA that…

A: Amount in the IRA at the time of retirement (age 65) is the future value of the monthly deposits.…

Q: Use the formula for the value of an annuity to solve:To save for retirement, you decide to deposit…

A: The future value of the annuity is the total value of all the payments which occurred regularly at a…

Q: Suppose that at age 25, you decide to save for retirement by depositing $230 at the end of every…

A: Using the formula A = P* [(1+r)^n-1] / r Where r = rate per period i.e. 4.5%/12 = 0.003750 n = no.…

Q: You are to make monthly deposits of $625 into a retirement account that pays an APR of 11.4 percent…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: How much should you deposit at the end of each month in an IRA that pays 6%compounded monthly to…

A: First, we need to compute the corpus required to get annual interest.

Q: How much would you need to deposit in the account each month?

A: Information Provided: Future value = $410,500 Years = 15 Interest rate = 6.5% Deposits frequency =…

Q: Assume you decide to make weekly deposits of $100 into a savings account over the next 30 years.…

A: given, A = $100 q ( payment frequency) = 52 m ( compounding frequency) = 365 t ( number of periods)…

Q: You want to purchase an annuity on your 30th birthday to provide you with $15,000 semiannual annuity…

A: present value of annuity we need to calculate pv = 15000[1/0.05 - 1/0.05(1+0.05)40] =…

Q: After retirement, you expect to live for 25 years. You would like to have a $95,000 income each…

A: Here,

Q: if you are 18 years old, deposit $5000 each year into a traditional IRA for 52 years, at 6% interest…

A: Annuity, A = $ 5,000Interest rate per year, R = 6%Period, N = 52 years

Q: To save for retirement, you decide to deposit $100 at the end of each month in an IRA that pays 5.5%…

A: Annuity refers to the periodic payments or receipts over a specified period of time.

Q: Starting at age 35, you deposit $2000 a year into an IRA account for retirement. Treat the yearly…

Q: Your employer offers a 401(k) plan with a 17% match, and you set a goal of retiring in 35 years with…

A: Given: Value today = $1.1 million or $1100000 Inflation rate = 1.5% Annual rate = 1.2% Number of…

Q: You are planning to make annual deposits of $3,600 into a retirement account that pays 8 percent…

A: The company will invest in another company to earn profits from the investments. The company will…

Q: At age 30, to save for retirement, you decide to deposit $100 at the end of each month into an IRA…

A: An ordinary simple annuity is the annuities when a series of equal payments are required to be made…

Q: Your employer offers a 401(k) plan with a 16% match, and you set a goal of retiring in 31 years with…

A: 401(k) is a type of retirement plan which allows investor to accumulate funds for retirement by…

Q: How much should you deposit at the end of each month into an investment account that pays 9%…

A: The future value of an annuity is the future worth of a series of investments at a certain rate and…

Q: At the age of 33, to save for retirement, you decide to deposit $80 at the end of each month in an…

A: NOTE: There is some information missing in the question. The retirement age in not mentioned in the…

Q: Suppose you want to have $800,000 for retirement in 25 years. Your account earns 7% interest. a)…

A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where, r = rate of interest per period i.e.…

Q: You would like to save $250,000 for retirement. If you are planning to retire 30 years from now, how…

A: Future value of the retirement account should be (FV) = $250000 Number of periods of month payments…

Q: You deposit $5000 each year into your retirement account, starting in one year. If these funds earn…

A: Annual deposit = $ 5000 Annual interest rate = 5% Number of annual deposits = 27

Q: You want to retire at age 65. You decide to make a deposit to yourself at the end of each year into…

A: Future value of a regular annuity can be computed by using the following formula: Here, Future…

Q: You plan to deposit $250 each month into an IRA earning 0.25% interest monthly. How much will you…

A: Answer: Following information are given: Monthly deposit = $250 Time = 10 years No of periods =…

Q: To prepare for retirement, you are going to deposit money into a pension plan account every month…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Suppose you want to have $800,000 for retirement in 20 years. Your account earns 7% interest. a) How…

A: Monthly payment refers to the periodic payment. These payments are made upto a fixed period or as…

Q: Suppose you set up a new IRA (individual retirement account) that pays an APR of 8.5%, compounded…

A: APR = 8.5% Monthly Compounding Interest Rate = 8.5%/12 Monthly Contribution = 130 N = 11*12 = 132…

Q: HOW MUCH SHOULD YOU DEPOSIT AT THE END OF EACH MONTH INTO A INVESTMENT ACCOUNT THAT PAYS 8% COMPOUND…

A: Calculation of Amount of Deposits and Total Interest:The amount of deposits is 338.49 and total…

Q: You would like to save $250,000 for retirement. If you are planning to retire 30 years from now, how…

A: Dear student we need to use excel for calculation of monthly deposit(PMT) by using PMT functions.

Q: You plan to make a series of deposits in an individual retirement account. You will deposit $1,000…

A: According to the time value of money concept, money available today has interest earnings ability.…

Q: You plan to place $1,200 per year into a Roth IRA. You expect to earn 6% APR and you will place this…

A: Given, The yearly deposit is $1,200 Rate is 6% Term of investment is 35

Q: Sally Winston is contributing $3200 each year to a Roth IRA. The IRA earns 3.8% per year. How much…

A: In the above question, yearly payments of $3,200 each are made at the beginning of the period into…

Q: You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement.…

A: Given, The cashflows is $90,000 The rate of interest is 8%

Q: For someone who has $100,000 to save for 20 years, would a 4% Certificate of Deposit that compounds…

A: Certificate Of Deposits A certificate of deposit (CD) is a bank or credit union product that pays a…

Q: You deposit $1,000 in an account at the Lifelong Trust Savings and Loan that pays 7% interest…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: At age 30 you deposit $200 at the end of each month into an annuity that pay 3.5% interest…

A: Given information Monthly deposits : $200 Interest : 3.5% Time period : 66-30=36 years

Q: At an interest rate of 8% per year, the amount you must deposit in your retirement account for years…

A: The principle of present value indicates that a sum of money now is worth more than the same sum of…

Q: You are offered the opportunity to put some money away for retirement. You will receive 10 annual…

A: Here, Annual Payments Received is $5000 Interest Rate is 12% Monthly Interest Rate is 12% / 12 = 1%…

Q: Suppose that for retirement purposes, over the course of 27 years, you make monthly deposits of…

A: given information monthly deposits = $480 interest rate = 4.954%

Q: You decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need…

A: Interest rate (r)= 3% Compounding (k)= annually Time period (n)= 30 years Retirement Income (d)=…

Q: a. You plan to invest $5,000 in an individual retirement arrangement today at a nominal annual…

A: Future value is the value of current asset or investment at a future date. Future value is…

Q: How much must you deposit each year into your retirement account starting now and continuing through…

A: The current value of a forthcoming sum of money or series of payments with a predetermined rate of…

Q: How much should you deposit at the end of each month in an IRA that pays 12% compounded monthly to…

A: To solve this question , first we have to find the amount that can pay us $ 90000 per year. Then we…

Q: ou decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need…

A: PV is the current worth of cash flows that are expected to occur in the future.

Q: You plan to invest $2,000 in an individual retirement arrangement (IRA) today at a stated interest…

A: Introduction: The accumulation of amount at the end of a particular period can be defined as future…

Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

At the age of 24, to save for retirement, you decide to deposit $80 at the end of
each month in an IRA that pays 5% compounded monthly.
a. You will have approximately S in the IRA when you retire.
(Do not round until the final answer. Then round to the nearest dollar as needed.)
Use the following formula to determine how much you will have in the IRA
when you retire at age 65.
a.
P[(1 + n* - 1]
A=
or
nt
- 1
A =
b.
Find the interest.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

At the age of 33, to save for retirement, you decide to deposit $80 at the end of each month in an IRA that pays 44% compounded monthly A) You will have approximately $ ? in the IRA when you retire. (Do not round until the final answer. Then round to the nearest dollar as needed.) B) The interest is approximately $ ? (Use the answer from part a to find this answer. Round to the nearest dollar as needed.)
At the age of 35, to save for retirement, you decide to deposit $90 at the end of each month in an IRA that pays 5% compounded monthly. a. b. Use the following formula to determine how much you will have in the IRA when you retire at age 65. A= A= P[(1+r)²-1] r P -|C Find the interest. or a. You will have approximately $ when you retire. (Do not round until the final answer. Then round to the nearest dollar as needed.) in the IRA b. The interest is approximately $ (Use the answer from part a to find this answer. Round to the nearest dollar as needed.)
At the age of 30, to save for retirement, you decide to deposit $70 at the end of each month in an IRA that pays 4% compounded monthly. a. Use the following formula to determine how much you will have in the IRA when you retire at age 65. P[(1+r)²-1] A = A: or (7) b. Find the interest. ID a. You will have approximately $ in the IRA when you retire. (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The interest is approximately $ (Use the answer from part a to find this answer. Round to the nearest dollar as needed.)
Due Suppose that at age 25, you decide to save for retirement by depositing $230 at the end of every month in an IRA that pays 4.5% compounded monthly. ns /21 2) (a) How much will you have from the IRA when you retire at age 59? dollars (Round to the nearest dollar.) sion (b) Find the interest, dollars (Round to the nearest dollar.) Formulas: P(1+ )"-1] () A A() . P
At age 25, to save for retirement, you decide to deposit $50 at the end of each month in an IRA that pays 5.5% compounded monthly. Solve, a. How much will you have from the IRA when you retire at age 65? b. Find the interest. (Round answers to the nearest dollar).
As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 3% interest compounded annually. (Round your answers to the nearest cent.) (a) How much (in $) would the account be worth after 10 years? $70846.77 (b) How much (in $) would the account be worth after 20 years? $166058.91 (c) When you retire in 30 years, what will be the total worth (in $) of the account? $294016.07 (d) If you found a bank that paid 6% interest compounded annually rather than 3%, how much (in $) would you have in the account after 30 years? $28460.95 (e) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.
At age 30, to save for retirement, you decide to deposit $100 at the end of each month into an IRA that pays 9.5% compounded monthly. a. How much will you have from the IRA when you retire at age 65? b. Find the interest.
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase the contribution to $274 per month for another 20 years, and finally, $424 per month for the last 10 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Value of retirement assets
Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once you retire, with the first retirement funds withdrawn one year from the day you retire. You estimate that you will earn 6% per year on your retirement funds and that you will need funds up to 25 years after retirement. Use the PV of an ordinary annuity due formula. a) Calculate the amount you must deposit in an account today so that you have enough funds for retirement b) Calculate the amount you must deposit each year, starting one year from today, so that you have enough funds for retirement.
At age 30, to save for retirement, you decide to deposit $300 into an IRA at the end of each month at an interest rate of 6% per year compounded monthly. How much will you have from the IRA when you retire at age 65? Use this formula: Find how much of the total amount is from interest.