You are investing in a retirement account and plan to deposit $5,000 per year into the account for the next 20 years, starting from today. The account offers an annual interest rate of 6%. How much money will you have in your retirement account at the end of t

Q: Suppose you want to have $700,000 for retirement in 25 years. Your account earns 5% interest. How…

A: The retirement amount after 25 years (FV) is $700,000. The period is 25 years. The rate of interest…

Q: Use the savings plan formula to answer the following question. At age 45, you start saving for…

A: Solution:-When an equal amount is deposited each period at end of period, it is called ordinary…

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

A: The monthly deposit is the amount that is paid every month until the maturity of the period.

Q: To find the value of an annuity due, you will multiply the value of the ordinary annuity by…

A: Present value is the current worth of the future payments that are to be received. As per time value…

Q: Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase…

A: Future value refers to the value an investment or cash flow is expected to grow to at a specific…

Q: What are the monthly payments you will receive if your retirement nest egg of $ 1,000,000 is in a 5%…

A: Present valueof the retirement Amount $ 10,00,000.00Interest rate5%Tenure, years20Compounding…

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 have decided you would like to deposit $5,000 into your account today and not touch it until you…

A: Future value of amount is the value of today money in future based on time and interest and is equal…

Q: Determine the size of your investment account 30years from now (when you plan to retire) if you…

A: Future value of annuity , FV= P * ( (1+r)^t -1) /rwhere P =$12,000r=0.10t=30 yearsFV =?

Q: You are considering putting $3,500 in a savings account that pays 11 percent in interest each year.…

A: A) Future Value = Present Value*(1+Interest Rate)^No. of periods WherePresent Value = $3500Interest…

Q: Assume that today is January 1, 2022, and that you just turned 25 years old. You plan to retire when…

A: Amount of required in the retirement account as on the date of retirement is the present value of…

Q: You will need to deposit $_______ each quarter.

A: Future Value of Annuity: It is computed by compounding the present stream of annuity cash flows…

Q: The Solvent Insurance Co. will pay you $4,750 a year for 15 years in exchange for $45,000 today.…

A: in this you have to find out present value FACTOR and from that you can get interest rate.

Q: Assume You plan to retire and start depositing $10,000 in your account at the end of every year for…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Calculate how much you will have to save each month between now and then to have $300,000 in your…

A: Calculate the monthly saved amount as follows:

Q: What will be the value in your account at the end of Year 30?

A: Future Value of Annuity: It represents the future worth of the annuity payments made for a given…

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: Your pension plan is an annuity with a guaranteed return of 5.8% per year (compounded quarterly).…

A: To solve this problem, we need to break it down into two main parts:1. Accumulation Phase (Before…

Q: Suppose you want to have $400,000 for retirement in 30 years. Your account earns 5% interest. How…

A: Computation as follows: Hence, each month deposit will be $480.62.

Q: what is the present value of this stipen

A: Present Value:  The present value is the present sum of a series of fixed payments. The series of…

Q: You are saving for retirement. To live comfortably, you decide that you will need $2.5 million by…

A: Yearly deposit refers to an amount that is kept aside for the purpose of saving in any of the…

Q: tire 35 years from today. In retirement, you will withdraw $200,000 from your retirement account…

A: There is a need for adequate planning for retirement and that should be done on the time to have…

Q: You have decided to start a savings plan for your retirement. You plan to make an annual deposit of…

A: The objective of the question is to calculate the future value of a series of annual deposits of…

Q: Your pension plan is an annuity with a guaranteed return of 4% per year (compounded quarterly). You…

A: Formula for Calculating Future Value = PMT [(1+i)n - 1] / i Here, PMT = 1600              i    =…

Q: It is now the beginning of the year. Assume that, starting at the end of the year, you will make…

A: The future value of annuity is calculated using following equation Future value = P×(1+r)n-1r Where,…

Q: Suppose you want to have $700,000 for retirement in 30 years. Your account earns 10% interest. a)…

A: Fresent value is an estimate of the future cash flows ​​that may be received at a future date,…

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: You plan to make annual deposits of $5,000 per year at the beginning of each year into your…

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 $500,000 for retirement in 25 years. Your account earns 9% interest. a) How…

A: An annuity is a series of equal payments made at regular intervals. It accumulates interest on a…

Q: Your insurance company offered you an annuity that pays you $100 at the end of each year. The life…

A: PV computes the existing value of future benefits by discounting future cash flows with a given…

Q: A person deposits $2000 every year into an account which has an interest rate of 2.5% annually. If…

A: This problem is based on the concept of the time value of money, which states that a sum of money…

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: if your bank pays 3.73% interest, how much will you accumulate in the account at the end of 30 years

A: We can determine the accumulated amount using the FV of annuity due formula as below:In the formula…

Q: If you save $1298 per year for the next 17 years and earn 7.2% interest on your savings, how much…

A: The future value of annual savings is computed based on the time value of money concept. As per this…

Q: In planning for your retirement, you would like to withdraw $50, 000 per year for 19 years. The…

A: Annuity refers to a sum of cash flows occurring on a periodic basis. The cash flow amount is usually…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.