Question
I can invest for a pension in either the Senex or the Geriatrix pension plan. Senex requires me to invest $1500 a year for the
I can invest for a pension in either the Senex or the Geriatrix pension plan. Senex requires me to invest $1500 a year for the next 15 years, whereas Geriatrix requires an immediate deposit of $5 000 and a subsequent annual investment of $1200 a year. Senex pays 10% on my investments, whereas Geriatrix pays 9%. How much more money will I have in my pension plan in 15 years time if I invest in Senex?
A)$1,500
B)$1,600
C)$1,700
D)$1,800
I've been doing FW(Senex) = 1,500 (F/A, 0.1, 15) = $47,658.72 and FW(Geriatrix) = 5,000 (F/P, 0.09, 15) + 1,200 (F/A, 0.09, 15) = $53,445.51
Which means you would have -5,786.79 if you invest in Senex. The solution says it's A)$1,500. What am I doing wrong?
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