YOU and your BEST FRIEND just graduated from college. You both went to the same college and majored in the same field. You both started working at age 22 in the same workplace. Each of you decided upon a different course of action for your respective retirement plans. Assuming each plan earned 10% and both of you decided to retire at age 60, calculate the earnings each plan generated. Upon the advice of your Personal Finance professor (hint, hint), YOU began immediately putting $6,000 per year in an individual retirement account (IRA) and $19,500 per year in a 401K. You contributed for a total of 15 years. After 15 years, you made no further contributions into the account. Your BEST friend, did not contribute to their retirement accounts until they turned 30, even though you both worked in the same place and received the same plans. They had planned to simply invest $6000 and $19,500 each year for the remaining years until they retired at age 60. How much did You contribute OUT of pocket in total into your plan?
YOU and your BEST FRIEND just graduated from college. You both went to the same college and majored in the same field. You both started working at age 22 in the same workplace. Each of you decided upon a different course of action for your respective retirement plans. Assuming each plan earned 10% and both of you decided to retire at age 60, calculate the earnings each plan generated. Upon the advice of your Personal Finance professor (hint, hint), YOU began immediately putting $6,000 per year in an individual retirement account (IRA) and $19,500 per year in a 401K. You contributed for a total of 15 years. After 15 years, you made no further contributions into the account. Your BEST friend, did not contribute to their retirement accounts until they turned 30, even though you both worked in the same place and received the same plans. They had planned to simply invest $6000 and $19,500 each year for the remaining years until they retired at age 60. How much did You contribute OUT of pocket in total into your plan?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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STORY (very similar to what was shown in class): YOU and your BEST FRIEND just graduated from college. You both went to the same college and majored in the same field. You both started working at age 22 in the same workplace. Each of you decided upon a different course of action for your respective retirement plans. Assuming each plan earned 10% and both of you decided to retire at age 60, calculate the earnings each plan generated.
Upon the advice of your Personal Finance professor (hint, hint), YOU began immediately putting $6,000 per year in an individual retirement account (IRA) and $19,500 per year in a 401K. You contributed for a total of 15 years. After 15 years, you made no further contributions into the account.
Your BEST friend, did not contribute to their retirement accounts until they turned 30, even though you both worked in the same place and received the same plans. They had planned to simply invest $6000 and $19,500 each year for the remaining years until they retired at age 60.
How much did You contribute OUT of pocket in total into your plan?
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