Question

Amy Parker, a 22-year-old and newly hired marine biologists quick to admit that she does not plan to keep close tabs on how her 401) r ement plan wil grow with time. This sort of thing does not really interest her Ay's contribution, plus that of her employer amounts to $2.250 per year starting at age 23. Amy expects this amount to increase by 4% each year urbisheries at the age of 57 there will be 35 EOY payments What is the compounded future value of Amy's 4011) planificarns 9% per year? Click the icon to the stand annuity table for discrete compounding when i=4% per year Click the icon to view the interest and annuty table for discrete compounding when 9% per year, The compounded tuture value of Amy's 401) plan is milion (Round to the decimal places)

Answer 1

Given A 2 $2,250 Geometric gradient = 9% 20.04. interest rate : 9% 2 0.09 (c) Total time period = 35 years. Putting values in equation. P2 2,250[1-(1 + 0.04) 35 (1 + 0.09) 0.09 - 0.04 2 $36,301.35 Now, F = P(1 + i)." 2 36301-35 (1 +0.09) " - $441,054.594 Compounded tv e 14 0.741 million.