Tyler Winkle's employer in Pittsburgh makes a matching contribution of $2,000 a year to his 401(k) retirement account at work. If the dollar amount of the employer's contribution increases 6 percent annually, how much will the employer contribute to the plan in the twentieth year from now? Round Future Value of a Single Amount in intermediate calculations to four decimal places
Tyler Winkle's employer in Pittsburgh makes a matching contribution of $2,000 a year to his 401(k) retirement account at work. If the dollar amount of the employer's contribution increases 6 percent annually, how much will the employer contribute to the plan in the twentieth year from now? Round Future Value of a Single Amount in intermediate calculations to four decimal places
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
Related questions
Question
100%
Tyler Winkle's employer in Pittsburgh makes a matching contribution of $2,000 a year to his 401(k) retirement account at work. If the dollar amount of the employer's contribution increases 6 percent annually, how much will the employer contribute to the plan in the twentieth year from now? Round
Transcribed Image Text:Appendix A-1
1% 2% 3%
1.0100 1.0200 1.0300
2 1.0201 1.0404 1.0609
1
1.1700
1.1800
1.1100
1.2321
1.3689
1.4161 1.4400
1.3924
1.6430
3
1.0303 1.0612 1.0927
1.3676
1.6016
1.7280
1.6852
2.0053
4
11% 12% 13% 14% 15% 16% 17% 18% 19% 20%
1.1300 1.1400 1.1500 1.1600
1.1900 1.2000
1.2769 1.2996 1.3225 1.3456
1.4429 1.4815 1.5209 1.5609
1.8106
2.1003
2.4364
2.8262
3.2784
1.0406 1.0824 1.1255
1.9388
2.0736
1.8739
2.1924
2.5652
2.2878
2.4883
2.3864
2.8398
6 1.0615 1.1262
2.6996
3.0012
3.3793
3.1855
3.7589
2.9860
3.5832
4.2998
2.1436
3.5115
4.0214
4.7854
3.8030
4.1084
4.4355
5.1598
5.2338
5.6947
6.1917
4.8068
5.6240
6.1759
6.7767
7.4301
6.5801
8.0642
8.9161
7.6987
4% 5% 6% 7% 8% 9% 10%
1.0400 1.0500 1.0600 1.0700 1.0800 1.0900
1.1200
1.0816 1.1025 1.1236 1.1449 1.1664 1.1881
1.2544
1.1249 1.1576 1.1910 1.2250 1.2597 1.2950
1.4049
1.1699 1.2155 1.2625 1.3108 1.3605 1.4116
1.5735 1.6305 1.6890 1.7490
5 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4026 1.4693 1.5386
1.7623 1.8424 1.9254 2.0114
1.1941 1.2653 1.3401 1.4185 1.5007 1.5869 1.6771
1.9738 2.0820 2.1950 2.3131
7 1.0721 1.1487 1.2299 1.3159 1.4071 1.5036 1.6058 1.7138 1.8280
2.2107 2.3526 2.50 23 2.6600
8 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 1.7182 1.8509 1.9926
2.4760 2.6584 2.8526 3.0590
9 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.9990 2.1719 2.3579
2.7731 3.0040 3.2519 3.5179
10 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 1.9672
2.1589 2.3674 2.5937
3.1058 3.3946 3.7072 4.0456 4.4114
11 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 2.3316 2.5804 2.8531
3.4785 3.8359 4.2262 4.6524 5.1173
12 1.1268 1.2682 1.4258 1.6010 1.7959 2.0122 2.2522 2.5182 2.8127 3.1384
3.8960 4.3345 4.8179 5.3503 5.9360
7.2876
13 1.1381 1.2936 1.4685 1.6651 1.8856 2.1329 2.4098 2.7196 3.0658 3.4523
4.3635 4.8980 5.4924 6.1528 6.8858
8.5994 9.5964 10.6993
14 1.1495 1.3195 1.5126 1.7317 1.9799
2.2609 2.5785 2.9372 3.3417 3.7975
4.8871 5.5348 6.2613 7.0757 7.9875 9.0075 10.1472 11.4198 12.8392
15 1.1610 1.3459 1.5580 1.8009 2.0789
2.3966 2.7590 3.1722 3.6425 4.1772
5.4736 6.2543 7.1379 8.1371 9.2655 10.5387 11.9737 13.5895 15.4070
1.1726 1.3728 1.6047 1.8730 2.1829 2.5404 2.9522 3.4259 3.9703 4.5950
6.1304 7.0673 8.1372 9.3576 10.7480 12.3303 14.1290 16.1715 18.4884
1.1843 1.4002 1.6528 1.9479 2.29 20 2.6928 3.1588 3.7000 4.3276 5.0545
6.8660 7.9861 9.2765 10.7613 12.4677 14.4265 16.6722 19.2441
22.1861
1.1961 1.4282 1.7024 2.0258 2.4066 2.8543 3.3799 3.9960 4.7171
7.6900 9.0243 10.5752 12.3755 14.4625 16.8790 19.6733 22.9005 26.6233
1.2081 1.4568 1.7535 2.1068 2.5270 3.0256 3.6165 4.3157 5.1417
8.6128 10.1974 12.0557 14.2318 16.7765 19.7484 23.2144 27.2516
1.2202 1.4859 1.8061 2.1911 2.6533 3.2071 3.8697 4.6610 5.6044
9.6463 11.5231 13.7435 16.3665 19.4608 23.1056 27.3930 32.4294
1.2324 1.5157 1.8603 2.2788 2.7860 3.3996
4.1406 5.0338 6.1088
10.8038 13.0211 15.6676 18.8215 22.5745 27.0336 32.3238 38.5910
22 1.2447 1.5460 1.9161 2.3699 2.9253 3.6035 4.4304 5.4365 6.6586
12.1003 14.7138 17.8610 21.6447 26.1864 31.6293 38.1421 45.9233
23 1.2572 1.5769 1.9736 2.4647 3.0715 3.8197 4.7405 5.8715 7.2579 8.9543 11.0263 13.5523 16.6266 20.3616 24.8915 30.3762 37.0062 45.0076 54.6487
24 1.2697 1.6084 2.0328 2.5633 3.2251 4.0489 5.0724 6.3412 7.9111 9.8497 12.2392 15.1786 18.7881 23.2122 28.6252 35.2364 43.2973 53.1090 65.03 20 79.4968
25 1.2824 1.6406 2.0938 2.6658 3.3864 4.2919 5.4274 6.8485 8.6231 10.8347 13.5855 17.0001 21.2305 26.4619 32.9190 40.8742 50.6578 62.6686 77.3881 95.3962
1.2953 1.6734 2.1566 2.7725 3.5557 4.5494 5.8074 7.3964 9.3992 11.9182 15.0799 19.0401 23.9905 30.1666 37.8568 47.4141 59.2697 73.9490 92.0918 114.4755
1.3082 1.7069 2.2213 2.8834 3.7335 4.8223 6.2139 7.9881 10.2451 13.1100 16.7386 21.3249 27.1093 34.3899 43.5353 55.0004 69.3455 87.2598 109.5893 137.3706
28 1.3213 1.7410 2.2879 2.9987 3.9201 5.1117 6.6488
8.6271 11.1671 14.4210 18.5799 23.8839 30.6335 39.2045 50.0656 63.8004 81.1342 102.9666 130.4112 164.8447
29 1.3345 1.7758 2.3566 3.1187 4.1161 5.4184 7.1143 9.3173 12.1722 15.8631 20.6237 26.7499 34.6158 44.6931 57.5755 74.0085 94.9271 121.5005 155.1893 197.8136
30 1.3478 1.8114 2.4273 3.2434 4.3219 5.7435 7.6123 10.0627 13.2677 17.4494 22.8923 29.9599 39.1159 50.9502 66.2118 85.8499 111.0647 143.3706 184.6753 237.3763
40 1.4889 2.2080 3.2620 4.8010 7.0400 10.2857 14.9745 21.7245 31.4094 45.2593 65.0009 93.0510 132.7816 188.8835 267.8635 378.7212 533.8687 750.3783
1.6446 2.6916 4.3839 7.1067 11.4674 18.4202 29.4570 46.9016 74.3575
184.5648 289.0022 450.7359 700.2330 1083.657 1670.704 2566.215 3927.357
16
17
18
5.5599
6.1159
19
31.9480
6.7275
20
21
7.4002
38.3376
46.0051
55.2061
8.1403
9.9336
66.2474
26
27
1051.668 1469.772
50
117.3909
5988.914 9100.438
n
Future Value of a Single Amount ($1 at the End of n Periods) (Used to Compute the Compounded
Future Value of a Known Lump Sum)
1.1000
1.2100
1.3310
1.4641
1.6105
1.7716
1.9487
1.5181
1.6851
1.8704
2.0762
2.3045
2.5580
2.8394
3.1518
3.4985
3.8833
4.3104
4.7846
5.3109
5.8951
6.5436
7.2633
8.0623
8.9492
Expert Solution
Step 1
Future value of a single present amount
With periodic interest rate (r), periods (n) and present value (PV), the future value (FV) is calculated as shown below.
Future value factor can be calculated using 'r' and 'n' as shown above or it can be found in the future value table provided with question.
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