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Naddik [55]
3 years ago
13

Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does not plan to keep close tabs on ho

w her​ 401(k) retirement plan will grow with time. This sort of thing does not really interest her.​ Amy's contribution, plus that of her​ employer, amounts to ​$2 comma 150 per year starting at age 23. Amy expects this amount to increase by 3​% each year until she retires at the age of 57 ​(there will be 35 EOY​ payments). What is the compounded future value of​ Amy's 401(k) plan if it earns 5​% per​ year?
Business
1 answer:
lakkis [162]3 years ago
6 0

Answer:

Final Value= $370,481.13

Explanation:

Giving the following information:

Amy's contribution, plus that of her​ employer, amounts to ​$2,150 per year starting at age 23. Amy expects this amount to increase by 3​% each year until she retires at the age of 57 ​(there will be 35 EOY​ payments). Interest rate= 5%.

<u>First, we will add the growth of the deposits to the interest rate:</u>

Interest rate= 0.03 + 0.05= 0.08

Now, to calculate the final value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit= 2,150

i= 0.08

n= 35

FV= {2,150*[(1.08^35)-1]}/ 0.08= $370,481.13

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Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the f
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7 0
3 years ago
Discuss how dollar-cost-averaging and the ten percent solution could make someone wealthy
labwork [276]
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6 0
3 years ago
Jillian has just started her first job with a $45,000 salary at a company with a 401(k) plan that has a 100% match up to 3% gros
gogolik [260]

Answer:

Jillian

What Jillian should ideally do is:

a. Contribute 1650 in a Roth IRA, and 1350 In her company’s 401(k) plan.

Explanation:

a) Data and Calculations:

Salary = $45,000

401(k) = 3% of $45,000 = $1,350

Employer's match to the 401(k) = $1,350 (100%)

Savings affordable = $3,000

b) Jillian can contribute to Roth IRA and her company 401(k) which her company will also match 100%.  Her contributions to both funds are within the allowed limits.  In 2020, the allowed limit of 401(k) plan is $19,500 while that of Roth IRA is $6,000.

4 0
3 years ago
Associated Breweries is planning to market alcohol-free beer. To finance the venture it proposes to make a rights issue at $10 o
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Answer:

Number of new shares:

= 100,000×(1÷2)

= 50,000

Amount of new investment:

= 50,000×$10

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Share price after issue:

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3 0
3 years ago
Read 2 more answers
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