Twins graduate from college together and start their careers. Twin 1 invests $1500 at the end of each year for 10 years only (until age 33) in an account that earns 8%, compounded annually. Supposethat twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 8% compounded annually in order to havethe same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.)

Future value of money includes the amount that is being deposited and amount of compounding interest…

Answered: Twins graduate from college together…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 33P

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Twins graduate from college together and start their careers. Twin 1 invests $2000 at the end of each year for 10 years only (until age 31) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.) $1 Need Help? Read It
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