Q) Susan is 22 years old and today she opened a savings account that offers an interest rate of 12% per year, with an initial deposit of 15000 KD. For the following years she plans to deposit the same amount but with an increase of 150 KD every year until she retires at age 61. a) How much will Susan have available when she retires? b) Calculate the annual equivalent of Susan’s savings plan.
Q) Susan is 22 years old and today she opened a savings account that offers an interest rate of 12% per year, with an initial deposit of 15000 KD. For the following years she plans to deposit the same amount but with an increase of 150 KD every year until she retires at age 61. a) How much will Susan have available when she retires? b) Calculate the annual equivalent of Susan’s savings plan.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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Q) Susan is 22 years old and today she opened a savings account that offers an interest rate of 12% per year, with an initial deposit of 15000 KD. For the following years she plans to deposit the same amount but with an increase of 150 KD every year until she retires at age 61.
a) How much will Susan have available when she retires?
b) Calculate the annual equivalent of Susan’s savings plan.
Solve it early but correctly.
Typed or handwriting answer gives not solve in excel.
Expert Solution
Step 1 Part A
The amount that Susan will receive will be calculated by determining the period for the investment as well as the rate earned and growth rate.
Step 2
The amount Susan have available when retires is shown:
Hence, the amount at retirement is $11,128,241.06.
Note: The amount is in KD.
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