Formula for FV of annuity = Payment * [(1 + Interest rate)^No of payment - 1]/Interest rate
FV at the end of 25 years = 3000*((1.085)^25-1)/0.085 = 236003.38
Hence Janet will have $236003.38 at the end of 25 years.
4. Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will...
Question 1 Each year, you invest 100 in a saving account that earn 10%/year. How much will you have at the end of 20 years? Question 2 Today you deposit 1500 in a savings account that earns 5%/year. How much will you have after 20 years? Question 3 What is the present value of 20000 to be received 20 years from today if interest rate is 5.5%/year
Today is Janet’s 23rd birthday. Starting today, Janet plans to begin saving for her retirement. Her plan is to contribute $3,000 to a brokerage account each year on her birthday. Her first contribution will take place today. Her 42nd and final contribution will take place on her 64th birthday. Her aunt has decided to help Janet with her savings, which is why she gave Janet $10,000 today as a birthday present to help get her account started. Assume that the...
6.9. Future value of an ordinary annuity: Robert Hobbes plans to invest $25,000 a year at the end of each year for the next seven years in an investment that will pay him a rate of return of 11.4 percent. How much money will Robert have at the end of seven years? 6.12 Computing annuity payment: Kevin Winthrop is saving for an Australian vacation in three years. He estimates that he will need $5,000 to cover his airfare and all...
Today is Janet’s 23rd birthday. Starting today, Janet plans to begin saving for her retirement. Her plan is to contribute $ 3 ,000 to a brokerage account each year on her birthday. Her first contribution will take place today. Her 42nd and final contribution will take place on her 64th birthday. Her aunt has decided to help Janet with her savings, which is why she gave Janet $ 2 0,000 today as a birthday present to help get her account...
Today is Janet’s 23rd birthday. Starting today, Janet plans to begin saving for her retirement. Her plan is to contribute $4,000 to a brokerage account each year on her birthday. Her first contribution will take place today. Her 42nd and final contribution will take place on her 64th birthday. Her aunt has decided to help Janet with her savings, which is why she gave Janet $20,000 today as a birthday present to help get her account started. Assume that the...
FV/PV Annuity Problems Problem H-4 HB 302 FV/PV Annuity Problems 1. Carly is saving to open her own business in ten vears. She currently has $10,000 and she plans to save $2,000 per year for the next five vears and $3.000 each year for the following five years. How much will she have in 10 years if she earns a 10% return on her savings? 2. What is the rate of interest on a $10,000 loan that is to be...
An engineer expects to earn a $70,000 salary after she graduates. She anticipates that her salary will increase by an average of 4% each year until she retires 50 years later. If she deposits 10% of her salary into a retirement account at the end of each year, and the account earns 6% annual interest, how much will she have saved on the day she retires?
9) Miller's Hardware plans on saving $42,000, $54,000 and $58,000 at the end of each year for the next three years, respectively. How much will the firm have saved at the end of the three years if it can earn 4.5% on its savings? Explain your work
Agnes is 40 years old. She wants to know how much she should be saving each year for retirement. Below are the specifics: • She wants to retire at 60 and expects to live until she's 90 • She currently makes $45,000 and expects that to increase each year with inflation (2%). She thinks she will need about 70% of that to live on in retirement. . She has $40,000 in an RRSP Her investments are earning a real rate...
You're saving for retirement. If you put away $1,200 each year for 40 years, how much will you have at the end of 40 years if your retirement account earns 3% annually?