Suppose you're fresh out of college and have a new job where you're able, by being frugal, to put aside $400 from each monthly paycheck for 2 years to invest in a fund that pays you 6% interest, compounded monthly. By the end of two years you would have put $9600 total into that fund, and it would be worth $10,223.65 at that point. Not bad. You've made over $600! But by then there are other constraints on your monthly paycheck and you can't continue your good habit. However, you leave that $10,223.65 invested in the fund that pays 6% compounded monthly. How much is that investment worth when you go back to claim it when you retire, exactly 46 years later? Round your answer to the nearest dollar,
Suppose you're fresh out of college and have a new job where you're able, by being frugal, to put aside $400 from each monthly paycheck for 2 years to invest in a fund that pays you 6% interest, compounded monthly. By the end of two years you would have put $9600 total into that fund, and it would be worth $10,223.65 at that point. Not bad. You've made over $600! But by then there are other constraints on your monthly paycheck and you can't continue your good habit. However, you leave that $10,223.65 invested in the fund that pays 6% compounded monthly. How much is that investment worth when you go back to claim it when you retire, exactly 46 years later? Round your answer to the nearest dollar,
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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Transcribed Image Text:Suppose you're fresh out of college and have a new job where you're able, by being frugal, to
put aside $400 from each monthly paycheck for 2 years to invest in a fund that pays you 6%
interest, compounded monthly. By the end of two years you would have put $9600 total into
that fund, and it would be worth $10,223.65 at that point. Not bad. You've made over $600!
But by then there are other constraints on your monthly paycheck and you can't continue
your good habit. However, you leave that $10,223.65 invested in the fund that pays 6%
compounded monthly. How much is that investment worth when you go back to claim it
when you retire, exactly 46 years later? Round your answer to the nearest dollar,
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