2) Today, you celebrated your 30th birthday. Also, you just landed a new job, thanks to your excellent education at BW. The new firm provides you a 401-k plan, and you decide to deposit $400 every month for first 20 years. After that (since your kids are out in college and your living expenses are lower) you increase your contribution by $200/month, that results in a total contribution of $600/month. The firm matches it at 100% and deposits the money to the same account once a year. You retire on your 65th birthday and stop contributing to 401-k after your retirement. You will leave the account with the employer where it continues to earn interest. The account pays an interest of 6% per year compounded monthly. a) What is the account balance on your 65th birthday? b) What is the account balance on your 70th birthday? assuming you had a onetime withdrawal of $100,000 on your 67th birthday?

My answers were as follows: PLEASE LET ME KNOW IF THESE responses are correct if not can I receive some assistance.

Answer:

$400.00 * 12 months = $4800.00 1^st year of contribution with employer matching the 100% = $9600.00

$9600.00 * 20 years = $192,000.00 is what you have after the 20 years of your contribution and the firms 100% match yearly.

Next 15 years of contributions $600.00 * 12 months = $7200.00 * 15years = $108,000.00 * 2 (firms $108,000.00 match) = $216,000.00

Retire at age 65 401-k has a total of

(192,000.00 + 216,000.00) = $408,000.00

You retire on your 65^th birthday and stop contributing to 401-k after your retirement. You will leave the account with the employer where it continues to earn interest.

The account pays an interest of 6% per year compounded monthly.

What is the account balance on your 65^th birthday? $408,000.00 What is the account balance on your 70^th birthday? assuming you had a onetime withdrawal of $100,000 on your 67^th birthday? Account Balance on 70^th birthday is $376,489.99