I got a real job at a non-profit with benefits and everything else included, I went to a long benefits orientation that included a lot of information, my non-profit job is currently offering two options for my retirement. The first option: I invest $200 per month starting right away at an interest rate of 3 percent and they match it right away, making equal monthly contributions; or second option: I make contributions of $200 per month starting right away at an interest rate of 5 percent and they start matching after 5 years. In both cases the interest is compounded continuously. Lets assume I am going to be at this job for 20 years. Which is the better option for me? Show your work.

I got a real job at a non-profit with benefits and everything else included, I went to a long benefits orientation that included a lot of information, my non-profit job is currently offering two options for my retirement. The first option: I invest $200 per month starting right away at an interest rate of 3 percent and they match it right away, making equal monthly contributions; or second option: I make contributions of $200 per month starting right away at an interest rate of 5 percent and they start matching after 5 years. In both cases the interest is compounded continuously. Lets assume I am going to be at this job for 20 years. Which is the better option for me? Show your work.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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