finance project/ quantitative reasoning
Retirement Savings Carla's Retirement Savings 32. Carla's employer provides a 7% match* to employee retirement savings. As an example, if Carla saves $60, her employer adds $60 x 0.07 - $4.20 for a total "matched" investment amount of $64.20. a. b. During the first 5 years of employment, Carla set aside 10% of her monthly gross pay for retirement. Refer to 02 to find that value. a. If her employer matches 7% of the amount in Q2, how much extra did her employer add each month? b. So, what is the total "matched investment amount going into Carla's retirement account each month? c. Calculate the value of Carla's retirement account at the end of her first 5 years if we assume that she always invested the "matched" monthly amount (032b) into a plan with an APR of 6% C. I *Employer matching of retirement savings is real, although not every employer does it. Even when it is available, some people don't invest for retirement, so they pass up that free money! 33. After 5 years of employment, we calculated a new monthly investment amount for Carla. Refer to Q20 to find that value. a. a. If her employer matches 7% of the amount in Q20, how much extra did her employer add each month? b. So, what is the total "matched" investment amount going into Carla's retirement account each month? b. Carla opens a different retirement account when she increases her investment amount. She opens the account by using her existing retirement money (032c) as a one-time investment. She then starts contributing her new matched amount (33b) into that account with an APR of 6%. C. c. Calculate the value of Carla's new retirement account at the end of 35 more years. 34. Kyle's Retirement Savings Kyle doesn't start saving until he only has 20 years left until retirement. By then he has switched jobs and his new employer doesn't match his investment. Assume he also has an APR of 6%. How much money will he need to save each month to equal Carla's total retirement savings (233c)? 00 Carla Her annual salary is $51,000. What is her monthly gross pay? (gross means before taxes and other deductions) Kyle His annual salary is $51,000. What is his monthly gross pay? (gross means before taxes and other deductions) 1. Carla invests 10% of her monthly gross pay (Q1) into the company retirement plan. What is her retirement investment every month? Kyle isn't worried about saving for retirement yet, so he doesn't invest anything. $0 Carla pays less in taxes than Kyle because the money she puts into her retirement account is not taxed. Her remaining monthly pay is taxed at a 20% rate. Kyle's entire monthly gross pay (Q1) is taxed at a 20% rate since he does not invest for retirement. How much are his taxes every month? Subtract Carla's retirement investment (Q2) from her monthly gross pay (Q1) to calculate her remaining monthly pay. Then calculate 20% of her remaining monthly pay. How much are her taxes every month? 3. What is Carla's new monthly gross pay? What is Kyle's new monthly gross pay? 19. Carla continues to invest 10% of each monthly gross pay into the retirement account. Calculate her new monthly retirement investment. Kyle is having trouble paying his bills, so he can't set aside money for retirement. He doesn't invest anything. 20. $0 Retirement Savings Carla's Retirement Savings 32. Carla's employer provides a 7% match* to employee retirement savings. As an example, if Carla saves $60, her employer adds $60 x 0.07 - $4.20 for a total "matched" investment amount of $64.20. a. b. During the first 5 years of employment, Carla set aside 10% of her monthly gross pay for retirement. Refer to 02 to find that value. a. If her employer matches 7% of the amount in Q2, how much extra did her employer add each month? b. So, what is the total "matched investment amount going into Carla's retirement account each month? c. Calculate the value of Carla's retirement account at the end of her first 5 years if we assume that she always invested the "matched" monthly amount (032b) into a plan with an APR of 6% C. I *Employer matching of retirement savings is real, although not every employer does it. Even when it is available, some people don't invest for retirement, so they pass up that free money! 33. After 5 years of employment, we calculated a new monthly investment amount for Carla. Refer to Q20 to find that value. a. a. If her employer matches 7% of the amount in Q20, how much extra did her employer add each month? b. So, what is the total "matched" investment amount going into Carla's retirement account each month? b. Carla opens a different retirement account when she increases her investment amount. She opens the account by using her existing retirement money (032c) as a one-time investment. She then starts contributing her new matched amount (33b) into that account with an APR of 6%. C. c. Calculate the value of Carla's new retirement account at the end of 35 more years. 34. Kyle's Retirement Savings Kyle doesn't start saving until he only has 20 years left until retirement. By then he has switched jobs and his new employer doesn't match his investment. Assume he also has an APR of 6%. How much money will he need to save each month to equal Carla's total retirement savings (233c)? 00 Carla Her annual salary is $51,000. What is her monthly gross pay? (gross means before taxes and other deductions) Kyle His annual salary is $51,000. What is his monthly gross pay? (gross means before taxes and other deductions) 1. Carla invests 10% of her monthly gross pay (Q1) into the company retirement plan. What is her retirement investment every month? Kyle isn't worried about saving for retirement yet, so he doesn't invest anything. $0 Carla pays less in taxes than Kyle because the money she puts into her retirement account is not taxed. Her remaining monthly pay is taxed at a 20% rate. Kyle's entire monthly gross pay (Q1) is taxed at a 20% rate since he does not invest for retirement. How much are his taxes every month? Subtract Carla's retirement investment (Q2) from her monthly gross pay (Q1) to calculate her remaining monthly pay. Then calculate 20% of her remaining monthly pay. How much are her taxes every month? 3. What is Carla's new monthly gross pay? What is Kyle's new monthly gross pay? 19. Carla continues to invest 10% of each monthly gross pay into the retirement account. Calculate her new monthly retirement investment. Kyle is having trouble paying his bills, so he can't set aside money for retirement. He doesn't invest anything. 20. $0
