Question
STRATEGY 1: SAVINGS EARLY PLAN Assume that you are 22 years old and started saving for retirement on January 1, 2022. You plan to retire
STRATEGY 1: SAVINGS EARLY PLAN
Assume that you are 22 years old and started saving for retirement on January 1, 2022. You plan to retire on December 31, 2064, when you are 64 years old. There are 43 years from the time you started investing (saving) until you retire. You have no previous or other retirement savings when you start to save. Assume there are 365 days in each year from 2022 to 2064. (Ignore leap years). Assume that taxes will not affect any of the amounts or your savings.
You invest $250 at the end of each month into a retirement account paying 8.75% compounded monthly from January 1, 2022, until you retire. Show all work and answer the following questions:
- Assuming no withdrawals or additional payments were made, how much money will be in your retirement account after 43 years?
- Assuming you made all the monthly payments for 43 years, how much did you pay into your retirement account?
- Assuming you made all the monthly payments for 43 years, how much interest did you earn over the 43 years?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started