entering the workforce plans to make monthly contributions to a retirement account in the amount of $210 beginning at the end of next month and continuing for the next 40 years. An individual (a) If the retirement account earns 10% compounded monthly, find the amount expected in the retirement account at the end of 40 years. Round to the nearest penny. (b) If the retirement account charges a maintenance fee of 2% each year, the net interest rate earned by the retiree becomes 8%. Find the amount expected in the retirement account. Round to the nearest penny. (c) Compare the answers from part (a) and part (b) above to determine the total percent lost by the retiree due to the fee. Round your answer to two decimal places.
entering the workforce plans to make monthly contributions to a retirement account in the amount of $210 beginning at the end of next month and continuing for the next 40 years. An individual (a) If the retirement account earns 10% compounded monthly, find the amount expected in the retirement account at the end of 40 years. Round to the nearest penny. (b) If the retirement account charges a maintenance fee of 2% each year, the net interest rate earned by the retiree becomes 8%. Find the amount expected in the retirement account. Round to the nearest penny. (c) Compare the answers from part (a) and part (b) above to determine the total percent lost by the retiree due to the fee. Round your answer to two decimal places.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 44P
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