Once college is completed, you start to look to the future especially if you are interested in

starting a family or retiring. In this section, we will delve into those idea further.

$13.)$ You have a child and decide to open an investment account to help them

$1$ point

pay for college. You want to open a lump sum investment at the time of their

birth for them to have $$50,000$ upon their $18$ th birthday. How much would

you need to invest if you found an account that earns $7\%$ compounded

annually?

Your answer

$14.)$ How much would the same college savings account, from the previous

question, have in it if you instead chose to invest $$500$ every year on their

birthday until they finished college at the age of $22?$

Your answer

$15.)$ Your job offers retirement savings plan to match your investments into

an account, up to $5\%$ of your gross monthly income. This account earns $5\mathrm{.}7\%$

compounded monthly. If you start using the company retirement plan and

choose to use the $5\%$ of your income for retirement when you are hired $($at

but stop adding money to the account after three years, how much

money will be in the account when you retire $($at $65)?$ The account continues

to use the same information as when you were putting money in$.$

Your answer

$16.)$ Suppose you open an IRA with your first contribution from your previous

account $($minus the company contribution$)$ as your opening balance. The

account has an interest rate of $6\%,$ compounded monthly. Assuming you

retire at $65,$ and assuming you contribute the same amount each month, how

much will you have in your account when you retire?