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Problem 4: Future and Present Values a. You are starting out in your first professional job after graduating from Indiana. You sign up for annuity
Problem 4: Future and Present Values a. You are starting out in your first professional job after graduating from Indiana. You sign up for annuity in which $200 is taken out of your paycheck each month. What is the value of your investment at the end of 25 years if the annual rate is 4% compounded monthly? (Identify the formula you would use and the value of each of the variables identified in that formula as you derive the answer to the above question.) b. At the end of the 25 years, you decided to roll over the money in the saving plan into a retirement savings plan. How much money will you receive each month for the next 20 years of your retirement under a plan that pays an annual interest rate of 4% compounded monthly? (Identify the formula you would use and the value of each of the variables identified in that formula as derive the answer to the above question.)
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