Question

Questions:

Answer 1

Answer:

Step-by-step explanation:

Q1 .  

Money saved every month = $200  

Time period until you retire = 35 years

Rate of Interest = 8%

The money is compounded monthly.

a). Amount for retirement = Saving annuity

Saving or making  a series of payments at regular intervals is called annuity.

Annuity formula is :

P_{n} = d((1 + r/k)^{nk} - 1)/(r/k)

PN is the balance in the account after N years.

d is the regular deposit (the amount you deposit each month)

r is the annual interest rate in decimal form(R/100)

k is the number of compounding periods in one year

Here d= $200 , r = 0.08 , n = 35 years , k = 12 (compounded monthly)

P_{n} = 200((1 + 0.08/12)^{(35*12)} - 1)/(0.08/12)

= $ 458776.50

b). Looking at the formula used in above option we can -

Increase number of years to increase retirement amount

Increase the monthly amount deposited

Increasing rate of interest also increases the amount

Compounding Annually , half yearly or quaterly will decrease the amount

c). Let us change the amount from $200 to $300 . Then amount will be

P_{n} = d((1 + r/k)^{nk} - 1)/(r/k)

P_{n} = 300((1 + 0.08/12)^{(35*12)} - 1)/(0.08/12)

= $ 688164.75

Answer 2

Answer:

A

hope this helps

Step-by-step explanation:

12 x 200 = 2,400

2,400 x 35 = 84,000