As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 5% interest compounded annually. (Round your answers to the nearest cent.) (a) How much (in $) would the account be worth after 10 years? $ (b) How much (in $) would the account be worth after 20 years? $ (c) When you retire in 30 years, what will be the total worth (in $) of the account?
As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 5% interest compounded annually. (Round your answers to the nearest cent.) (a) How much (in $) would the account be worth after 10 years? $ (b) How much (in $) would the account be worth after 20 years? $ (c) When you retire in 30 years, what will be the total worth (in $) of the account?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 7CE
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As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 5% interest compounded annually. (Round your answers to the nearest cent.)
(a)
How much (in $) would the account be worth after 10 years?
$
(b)
How much (in $) would the account be worth after 20 years?
$
(c)
When you retire in 30 years, what will be the total worth (in $) of the account?
$
(d)
If you found a bank that paid 6% interest compounded annually rather than 5%, how much (in $) would you have in the account after 30 years?
$
(e)
Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.
$
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