James and Shannon are 25, newly married, and ready to embark onthe journey of life. They both plan to retire 45 years from today.Because their budget seems tight right now, they had been thinkingthat they would wait at least 10 years and then start investing$2400 per year to prepare for retirement. Shannon just told James,that she had heard that they would actually have more money the daythey retire if they put $2400 per year away for the next 10 years -and then simply let that money sit for the next 35 years withoutany additional payments - than they would have if they waited 10years to start investing for retirement and then made yearlypayments for 35 years (as they originally planned to do).
Assume that all payments are made at the end of a year, and thatthe rate of return on all yearly investments will be 7.2%annually.
a) How much money will James and Shannon have in 45 years ifthey do nothing for the next 10 years, then puts $2400 per yearaway for the remaining 35 years?
b) How much money will James and Shannon have in 10 years ifthey put $2400 per year away for the next 10 years?
b2) How much will the amount you just computed grow to if itremains invested for the remaining 35 years, but without anyadditional yearly deposits being made?
c) How much money will James and Shannon have in 45 years ifthey put $2400 per year away for each of the next 45 years?
d) How much money will James and Shannon have in 45 years ifthey put away $200 per MONTH at the end of each month for the next45 years? (Remember to adjust the 9% annual rate to a Rate permonth!) (Round this rate per month to 5 places past the decimal)example of rounding: .062134 = .06213 or 6.213%
e) If James and Shannon wait 25 years (after the kids areraised!) before they put anything away for retirement, how muchwill they have to put away at the end of each year for 20 years inorder to have $8,000,000 saved up on the first day of theirretirement 45 years from today?
James and Shannon are 25, newly married, and ready to embark onthe journey of life. They both plan to retire 45 years from today.Because their budget seems tight right now, they had been thinkingthat they would wait at least 10 years and then start investing$2400 per year to prepare for retirement. Shannon just told James,that she had heard that they would actually have more money the daythey retire if they put $2400 per year away for the next 10 years -and then simply let that money sit for the next 35 years withoutany additional payments - than they would have if they waited 10years to start investing for retirement and then made yearlypayments for 35 years (as they originally planned to do).
Assume that all payments are made at the end of a year, and thatthe rate of return on all yearly investments will be 7.2%annually.
a) How much money will James and Shannon have in 45 years ifthey do nothing for the next 10 years, then puts $2400 per yearaway for the remaining 35 years?
b) How much money will James and Shannon have in 10 years ifthey put $2400 per year away for the next 10 years?
b2) How much will the amount you just computed grow to if itremains invested for the remaining 35 years, but without anyadditional yearly deposits being made?
c) How much money will James and Shannon have in 45 years ifthey put $2400 per year away for each of the next 45 years?
d) How much money will James and Shannon have in 45 years ifthey put away $200 per MONTH at the end of each month for the next45 years? (Remember to adjust the 9% annual rate to a Rate permonth!) (Round this rate per month to 5 places past the decimal)example of rounding: .062134 = .06213 or 6.213%
e) If James and Shannon wait 25 years (after the kids areraised!) before they put anything away for retirement, how muchwill they have to put away at the end of each year for 20 years inorder to have $8,000,000 saved up on the first day of theirretirement 45 years from today?
