Question
Hal Thomas, a 30-year-old college graduate, wishes to retire at age 60. To supplement other sources of retirement income, he can deposit $2000 each year
Hal Thomas, a 30-year-old college graduate, wishes to retire at age 60.
To supplement other sources of retirement income, he can deposit $2000
each year into a tax-deferred individual retirement arrangement (IRA). The IRA will earn a return of 13%
Over the next 30 years.
.
A.If Hal makes annual end-of-year $ 2000 deposits into the IRA, how much will he have accumulated by the end of his 60th year?
B.If Hal decides to wait until age 40 to begin making annual end-of-year $ 2000 deposits into the IRA, how much will he have accumulated by the end of his 60th year?
C.Using your findings in parts a and b, discuss the impact of delaying making deposits into the IRA for 10 years (age 30 to age 40) on the amount accumulated by the end on Hals 60th year.
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