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Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does...

Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does not plan to keep close tabs on how her​ 401(k) retirement plan will grow with time. This sort of thing does not really interest her.​ Amy's contribution, plus that of her​ employer, amounts to $2,300 per year starting at age 23. Amy expects this amount to increase by 4​% each year until she retires at the age of 62 (there will be 40 EOY​ payments). What is the compounded future value of​ Amy's 401(k) plan if it earns an annual interest rate of 7​ per​ year?

​(a) The compounded future value of​ Amy's 401(k) plan is $ ?million.​ (Round to three decimal​ places.)​

(b) What will be the compounded future if the plan earns an annual interest rate of 4​% per year​ (instead of 7​% per year​).

? million.​ (Round to three decimal​ places.)

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Answer #1

Amys annual contribution towards retirement plan = 2,300 The contribution will be increase by = 4% each year till the retire

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