Question

Mary and Steve are both exactly 20 years old. Mary will deposit $2800 at the end of every year for the next 40 years, until age 60, into her retirement fund. Steve is going to wait until age 40 to begin his savings. In order to try to catch up to Mary, Steve will deposit $5600 at the end of every year from age 40 to 60. Note that by age 60, both Mary and Steve will have contributed $112,000 into their respective funds. Calculate how much Mary and Steve will each have at age 60 if they each earn 3.8% compounded annually on their investments. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Mary will have $ Steve will have $ As a percentage of Steve's total, what percentage more does Mary have in her retirement fund at age 60? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Percentage

Answer 1

future value of Annuity - (litin 1) 3.8% 0 Payn 38/400 = oolt = 0.038 PO n = 40 years ina year. 2800 (CI+0.039) ) 0.038 2800 4.-1) 0.038 mary will have = 253842 Steves Amount 10.038 n=20 (= 5600 5600/(1+0.038 780, 0.038 5600 6.03% = 163284

Percentage of Mary exeater than Steve 7253842-163284x too 253842 35.67%