Suppose that between the ages of 22 and 30, you contribute $2000 per year to a 401(k) and your employer contributes $1000 per year on your behalf. The interest rate is 9.3% compounded annually. What is the value of the 401(k) after 8 years? b. Suppose that after

Suppose that between the ages of 22 and 30, you contribute $2000 per year to a 401(k) and your employer contributes $1000 per year on your behalf. The interest rate is 9.3% compounded annually. What is the value of the 401(k) after 8 years? b. Suppose that after

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 16PROB

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Question

a. Suppose that between the ages of 22 and

30,

you contribute

$2000

per year to a 401(k) and your employer contributes

$1000

per year on your behalf. The interest rate is

9.3%

compounded annually. What is the value of the 401(k) after

years? b. Suppose that after

years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the401(k). How much money will you have in the plan when you reach age 65? c. What is the difference between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan?

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