Question
1. A couple saves $500.00 per month (end of month) for 40.00 years. They can earn 6.00% annual interest with monthly compounding on this account.
1. A couple saves $500.00 per month (end of month) for 40.00 years. They can earn 6.00% annual interest with monthly compounding on this account. The couple wants their retirement account to last for 25.00 years. When they retire, they will move their savings into a money market fund that pays 2.40% annual interest with monthly compounding.
2. Assuming they withdraw at the beginning of the month, what monthly withdrawals will this account support?After graduating from college with a bachelor of business administration, you begin an ambitious plan to retire in 26.00 years. To build up your retirement fund, you will make quarterly payments into a mutual fund that on average will pay 12.60% APR compounded quarterly. To get you started, a relative gives you a graduation gift of $2,901.00. Once retired, you plan on moving your investment to a money market fund that will pay 6.48% APR with monthly compounding. As a young retiree, you believe you will live for 33.00 more years and will make monthly withdrawals of $10,449.00. (YOUR WITHDRAWALS ARE AT THE BEGINNING OF THE MONTH!!!!) To meet your retirement needs, what quarterly payment should you make?
3.An account pays interest by the quarter. It pays at a rate of 3.64% APR with quarterly compounding. However, an investor would like to contribute once a year to the account. At the end of each year, an investor will contribute $10,000.00. What will be the future value of this account in 20.00 years?
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