1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Travka [436]
3 years ago
11

In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compo

unding period.
An individual retirement account, or IRA, earns tax-deferred interest and allows the owner to invest up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.3%. Joe deposits $5000 once each year, while Jill has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited automatically. How much will each have at age 65? (Round your answer to the nearest cent.

Joe $

Jill $
Mathematics
1 answer:
Sholpan [36]3 years ago
8 0

Answer:

Ans. Joe will have $720,862.28 and Jill will have $819,348.90 after 30 years.

Step-by-step explanation:

Hi, since the interest is compounded with each payment, the effective rate of Joe is exactly equal to its compounded rate, that is 9.3%, but in the case of Jill, this rate is compounded weekly, this means that we have to divide 9.3% by 52 (which are the weeks in a year) in order to obtain an effective rate, in our case, effective weekly.

On the other hand, the time for Joe is pretty straight forward, he saves for 30 years at an effective annual interest rate of 9.3%, but Jill saves for 30*52=1560 weeks, at a rate of 0.1788% effective weekly.

They both have to use the following formula in order to find how much money will they have after 30 years of savings.

FutureValue=\frac{A((1+r)^{n}-1) }{r}

In the case of Joe, this should look like this

FutureValue=\frac{5,000((1+0.093)^{30}-1) }{0.093} =720,862.28

In the case of Jill, this is how this should look like.

FutureValue=\frac{96.15((1+0.001788)^{1560}-1) }{0.001788} =819,348.90

Best of luck.

You might be interested in
Sonia finds a 3/4- full bag of chips . she eats the rest of the chips in the bag. Then she opens another small bag of chips. Son
frutty [35]
The fraction can be write as 7/8.

3/4=6/8
6/8+1/8= 7/8
4 0
3 years ago
How many ounces are in 1/4 pound of ointment
Dmitriy789 [7]

C.4 ounces is the correct answer

My reasoning - 16 ounces in a lb

6 0
3 years ago
Read 2 more answers
What decimal is less than 0.5
stira [4]
0.01 is less than 0.5
5 0
3 years ago
Read 2 more answers
This is correct right?↓
Doss [256]

Answer:

udud8ducififidid

dudcucucuc

7 0
3 years ago
Michael is doing an underwater handstand. His feet are sticking up 0.5 meters above the surface of the water Michael's hands are
Jlenok [28]
1.3 meters below the surface of the water
6 0
3 years ago
Read 2 more answers
Other questions:
  • Find the volume of the figure the diameter of the base is 4 cm
    8·2 answers
  • Find the slope of the line.
    5·2 answers
  • The sum of two numbers is 436. The larger number is 3 times the smaller number. What are the numbers?
    10·1 answer
  • What is the expanded form for 1111.111
    9·1 answer
  • You purchased a stock for $150 per share. The value of the stock has increased by 25% per year. Which function represents the va
    13·1 answer
  • Which algebraic expression is equivalent to the expression below? 9(4x + 5) + 15
    12·1 answer
  • Jacob needs 48 ounces of tomatoes for the spaghetti sauce. He is choosing between two brands of tomatoes. Find the unit rate for
    13·2 answers
  • What is 9 times 9 could you answer this qustion
    9·2 answers
  • What is the perimeter of rectangle e f g h
    11·1 answer
  • From quadrilateral ABCD is a quadrilateral with area of ​​48 square units, find the length of AC.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!