135.
You started your first job after graduating from college. Your company offers a retirement
plan for which the company contributes 25 percent of what you contribute each year. You
expect to contribute $5,000 per year from your salary. You decide to invest the
contributions in assets that you expect to earn 8 percent per year. If you plan to retire in
35 years, how big will you expect that retirement account to be?
136.
You started your first job after graduating from college. Your company offers a retirement
plan for which the company contributes 50 percent of what you contribute each year. You
expect to contribute $2,000 per year from your salary. You decide to invest the
contributions in assets that you expect to earn 10 percent per year. If you plan to retire in
40 years, how big will you expect that retirement account to be?
137.
Sally saves $500 per month in her retirement plan. She plans on making monthly
contributions for 35 years. If her account earns a 12 percent annual interest rate, how
much will she have at the end of 35 years and what percent of the total are her out-of–
pocket contributions?
138.
Jane has been saving $500 in her retirement account each month for the last 20 years and
plans to continue contributing $500 each month for the next 20 years. Her account has
been earning an 8 percent annual interest rate and she expects to earn the same rate for
the next 20 years. Her twin brother, Hal, has not saved anything for the last 20 years. Due
to sibling rivalry, he wants to have as much as Jane is expected to have at the end of 20
years. If Hal expects to earn the same annual interest rate as Jane, how much must Hal
save each month to achieve his goal?
139.
Jane has been saving $450 in her retirement account each month for the last 20 years and
plans to continue contributing $450 each month for the next 20 years. Her account has
been earning a 9 percent annual interest rate and she expects to earn the same rate for
the next 20 years. Her twin brother, Hal, has not saved anything for the last 20 years. Due
to sibling rivalry, he wants to have as much as Jane is expected to have at the end of 20
years. If Hal expects to earn the same annual interest rate as Jane, how much must Hal
save each month to achieve his goal?
140.
Jane has been saving $200 in her retirement account each month for the last 20 years and
plans to continue contributing $200 each month for the next 20 years. Her account has
been earning an 8 percent annual interest rate and she expects to earn the same rate for
the next 20 years. Her twin brother, Hal, has not saved anything for the last 20 years. Due
to sibling rivalry, he wants to have as much as Jane is expected to have at the end of 20
years. If Hal expects to earn the same annual interest rate as Jane, how much must Hal
save each month to achieve his goal?
141.
Your current $95,000 mortgage calls for monthly payments over 30 years at an annual rate
interest rate of 6 percent. If you pay an additional $50 each month beginning with the first
payment, how soon do you pay off your mortgage?
142.
Your current $115,000 mortgage calls for monthly payments over 30 years at an annual
rate interest rate of 7 percent. If you pay an additional $50 each month beginning with the
first payment, how much interest expense do you save by pre-paying?
143.
Your current $155,000 mortgage calls for monthly payments over 25 years at an annual
rate interest rate of 6 percent. If you pay an additional $50 each month beginning with the
first payment, how much interest expense do you save by pre-paying?
144.
After saving diligently your entire career, you and your spouse are ready to retire with a
nest egg of $600,000. You need to invest this money in a mix of stocks and bonds that will
allow you to earn $5,000 per month for 30 years. What annual interest rate (APR) do you
need to earn?
145.
After saving diligently your entire career, you and your spouse are ready to retire with a
nest egg of $500,000. You need to invest this money in a mix of stocks and bonds that will
allow you to earn $4,000 per month for 30 years. What annual interest rate (APR) do you
need to earn?
146.
Which of the following will increase the future value of an annuity?