Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Today, James Dunlop received a Congratulatory Greeting Card from Mr. Joe Biden, POTUS , as he celebrated his 100 th birthday. Exactly 75 years ago,

Today, James Dunlop received a Congratulatory Greeting Card from Mr. Joe Biden, POTUS, as he celebrated his 100th birthday.

Exactly 75 years ago, on his 25th birthday, James started working for Ford. He started depositing $200 every month to a retirement account. Deposits were made at the end of every month. Ford also deposited the money - matched it at 100%. Matching funds were deposited annually, end of every year. The account at Ford paid interest at 6.6 percent per year compounded monthly.

Exactly 50 years ago, on his 50th birthday, James left Ford and joined General Motors (GM). He transferred (rolled over) his entire account balance from Ford to a new retirement account at GM. The GM account paid a higher interest of 7.2 percent per year compounded annually.

a: What is the rolled-over amount from Ford to GM?

At GM, James started contributing 6% of his salary to the retirement account, deposits were made at the end of every year. GM matched the deposits at 66.6667%, deposits were made at the end of every year. Dunlops starting annual salary at GM was $60,000. He earned an average pay raise of 4% per year.

Exactly 25 years ago, on his 75th birthday, James retired from the workforce.

He rolled over the entire balance of the GM retirement account to Chase Bank.

b: How much did James transfer from GM to Chase Bank?

Chase pays interest at 6.00% compounded monthly.

Between Jamess 75th birthday and 80th birthday, there was no activity in the account.

However, the money continued to earn interest.

Exactly 20 years ago, beginning his 80th birthday, James started withdrawing $9,000 every month withdrawals occurring end of every month.

c: What is the account balance at Chase today? (Jamess 100th birthday)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Credit Portfolio Management

Authors: Greg Gregoriou, Christian Hoppe

1st Edition

0071598340, 978-0071598347

More Books

Students also viewed these Finance questions

Question

Identify the four steps of the investment planning process.

Answered: 1 week ago

Question

1. Define and explain culture and its impact on your communication

Answered: 1 week ago