Problem 7-04You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does thesame starting at age 45 and makes the contributions for 20 years. Both of you earn 7 percent annually on your investment. What amounts will you and yoursister have at age 657 Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.Amount on your account: $Amount on your sister's account: $Who has the larger amount at age 657-Select-the larger amount.

Since, in this question fixed amount is invested each year. So, it is the question of annuity.…

Answered: ou annually invest $2,000 in an…

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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Gilberto opened a savings account for his daughter and deposited $1000 on the day she was born. Each year on her birthday, he deposited another $1000. If the account pays 11% interest, compounded annually, how much is in the account at the end of the day on her 12th birthday? At the end of the day on her 12th birthday, the amount in the account is $ (Simplify your answer. Type an integer or a decimal. Round to the nearest cent if needed.)
(b) Chris Hitchcock is 43 years old today and he wishes to accumulate $512.000 by his 65 th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 43 th through his 64 th birthdays. What annual deposit must Chris make if the fund will earn 8% interest compounded annually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Annual deposit eTextbook and Media Save for Later Attempts: unlimited Submit Answer %24
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20.
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Monique contributed $500.00 every month into an RRSP for 15 years. What nominal annual rate of interest will the RRSP earn if the balance in Monique's account just after she made her last contribution was $200,000.00
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