Question
Asked May 15, 2019
22 views
 
At the age of 33​, to save for​ retirement, you decide to deposit $80 at the end of each month in an IRA that pays 44​% compounded monthly
A) You will have approximately $ ? in the IRA when you retire.
​(Do not round until the final answer. Then round to the nearest dollar as​ needed.)
B) The interest is approximately ​$ ?
​(Use the answer from part a to find this answer. Round to the nearest dollar as​ needed.)
 
 
 
check_circle

Expert Answer

Step 1

NOTE: There is some information missing in the question. The retirement age in not mentioned in the question. Since the age of retirement is missing in the question, so we are randomly assuming that the retirement age as 65 years.

Step 2

A)

Calculation of Amount in the account after retirement at the end of 65 years:

There are 32 years till the retirement date. Which means we can deposit $80 for 32 years.  The amount in the retirement account can be calculated using a excel function =FV, which denotes the future value of any investment which is shown below:

fullscreen
Step 3

The excel working is shown below:

...
fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Time Value

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: One year ago, Berardi corporation issued a series of 13% semiannual coupon callable bonds with par v...

A: We will use the RATE function inexcel to calculate the yield. Before we do so, please note the follo...

question_answer

Q: Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (o...

A: The correct answer is “Statement D”.

question_answer

Q: how to solve a-c?

A: Calculating the value of each amount in the flexible budget. We have,

question_answer

Q: Block, S., Hirt, G., & Danielsen, B. (2017). Foundations of Financial Management. New York, NY: ...

A: Note:Since we are entitled to answer up to 3 sub-parts, we shall answer the first 3 as you have not ...

question_answer

Q: The prices of a certain security follow a geometric Brownian motion with parameters mu=.12 and sigma...

A: The question has two parts:The probability that a call option will get exercised in 4 months - this ...

question_answer

Q: The prices of a certain security follow a geometric Brownian motion with parameters mu=.12 and sigma...

A: Let's pull together all the variables of Black Scholes Model:S = Current stock price = 40K = Strike ...

question_answer

Q: Storico Co. just paid a dividend of $2.65 per share. The company will increase itsdividend by 20 per...

A: Dividend refers to the payments made by a firm to its shareholders. A firm distributes dividends fro...

question_answer

Q: An individual wishes to borrow $10,000 for a year and is offered the following alternatives: a. A 10...

A: Calculating the effective interest rate on borrowing option 10% loan discounted in advances. We have...

question_answer

Q: Given relatively stable financial market conditions, determine which one of the followingbonds would...

A: The bonds that would exhibit the least price volatility is “5-year, 10% coupon bond”.