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Compounding Interest You know that paying yourself by depositing money in a savings account is a prudent start to your retirement plan. You determined that,

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Compounding Interest You know that paying yourself by depositing money in a savings account is a prudent start to your retirement plan. You determined that, based on your other obligations, you can save \$7,375.00 per year via an annual, single year-end deposit. You are 35 years old now, so your money will grow for the next 30 years until you turn 65 . You will open a savings account at the Wells Forgo branch near your home, Its savings accounts are paying 6% interest. The following table shows the future value factors for various periods and interest rates: Assignment: Chapter 14 Planning for Retirement Complete the following table by entering relevant values. Then use the table of future value factors to calculate the value of this nest egg. What will be the value of this meney in 30 years? (Note: Round to two decimal places.) You began saving at age 35. If you had started five years earlier, so that your funds would grow for years, what would your nest egg be worth, assuming the same interest rate and annual savings amount? (Note: Round to two decimal places.) Suppose that a new bank in town offers 8% interest. How much would your yearly deposits be worth if you open a savings account there, assuming that your funds are invested for 30 years and all other factors remain the same? Complete the following table by entering relevant values. Then use either the table of future value factors, the future value formula, or your financlaf calculator to calculate the value of this nest egg. (Hint: Remember that the FVA factor is based on the new interest rate now.) What wil be the value of this money in 30 years? (Note: Round to two decimal places.) Again, if you had started your savings program five years earlier, what would your nest egg be worth, assuming thet your funds were invested at this higher intarest rote, the annubl savings amount remains the same, and the funds are invested for years? (Note: Round to two decimal stacens.)

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