Your new job offers a savings plan that pays 1.00 percent in interest each month. You...

Question

Question

Your new job offers a savings plan that pays 1.00 percent in interest each month. You cant participate in the plan, however,

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

[A] Here we calculate the future value of the investment by using excel formula =FV(rate,nper,pmt) where

rate= 1% = 0.01

NPER = 28 years = 28*12 = 336 months

pmt = $550

The amount you will have after 36 years = FV(0.01,336,550) = $1,502,199.59

The amount you will have after 36 years = $1,502,199,.59

[B] Worth of salary increase today

Here, we have been given the FV and we have to calculate the Present value (PV)

FV = 50

nper = 8 years = 8*12 =96

rate = 0.01

Value of the salary increase today = PV(rate,nper,pmt,fv) in excel = PV(0.01,96,0,50) = $19.24

Value of the salary increase today = $19.24

Add a comment

Answer 2

Similar Homework Help Questions

Your new job offers a savings plan that pays 0.25 percent in interest each month. You...

Your new job offers a savings plan that pays 0.25 percent in interest each month. You can't participate in the plan, however, until you have 9 years with the company. At that time you will start saving $200 a month for the next 22 years. How much will you have in this savings account in 31 years? Round your answer to two decimals SO Another perk of your new job is that, after 9 years with the company, you will...
Hi please provide formulas used. Thanks :) Your new job offers a savings plan that pays...

Hi please provide formulas used. Thanks :) Your new job offers a savings plan that pays 0.75 percent in interest each month. You can't participate in the plan, however, until you have 10 years with the company. At that time you will start saving $450 a month for the next 29 years. How much will you have in this savings account in 39 years? Round your answer to two decimals. $ Another perk of your new job is that, after 10...
Your job pays you only once a year, for all the work you did over the...

Your job pays you only once a year, for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $67,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 10 percent of your annual salary in an account that will earn 10.7 percent per year. Your salary will increase...

Your job pays you only once a year for all the work you did over the...

Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you received your salary of $68,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 10 percent of your annual salary in an account that will earn 10.8 percent per year. Your salary will increase at...
2. You just graduated and landed your dream job (congratulations). Your new employer offers a number...

2. You just graduated and landed your dream job (congratulations). Your new employer offers a number of benefits including retirement savings. Five percent of your annual salary will go towards your retirement fund and the employer will match that amount. 2a. Please explain the basic structure of a retirement fund (how does it work?). 2b. Your retirement fund offers three different packages: 1. Invest in the S&P 500 2. Invest in small, start-up companies 3. Invest in government bonds with...
Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month...

Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month in a savings plan that earns 9%, compounded monthly. This savings plan continues for 13 years before new obligations make it impossible to continue. If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 28 years after the plan began? (Round your answer to the nearest cent.)

Your job pays you only once a year for all the work you did over the...

Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $46,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 2 percent of your annual salary in an account that will earn 9 percent per year. Your salary will increase...
Assume that you contribute $210 per month to a retirement plan for 15 years. Then you...

Assume that you contribute $210 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $410 per month for the next 25 years. Given a 9.0 percent interest rate, what is the value of your retirement plan after the 40 years. Round two decimals places Whats the future value of multiple annuities
Consider the two savings plans below. Compare the balances in each plan after 8 years. Which...

Consider the two savings plans below. Compare the balances in each plan after 8 years. Which person deposited more money in the plan? Which of the two investment strategies is better? Yolanda deposits $300 per month in an account with an APR of 5%, while Zach deposits $3600 at the end of each year in an account with an APR of 5%. The balance in Yolanda's saving plan after 8 years was s (Round the final answer to the nearest...

Consider that you are 30 years old and have just changed to a new job. You have $91,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $400 each month into y

Consider that you are 30 years old and have just changed to a new job. You have $91,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $400 each month into your new employer's plan. If the rolled-over money and the new contributions both earn a 7 percent annual return, how much should you expect to have when you retire in 38 years?

Your new job offers a savings plan that pays 1.00 percent in interest each month. You...

Homework Answers

Add Answer to:
Your new job offers a savings plan that pays 1.00 percent in interest each month. You...

Post as a guest

Earn Coins

Your new job offers a savings plan that pays 0.25 percent in interest each month. You...

Hi please provide formulas used. Thanks :) Your new job offers a savings plan that pays...

Your job pays you only once a year, for all the work you did over the...

Your job pays you only once a year for all the work you did over the...

2. You just graduated and landed your dream job (congratulations). Your new employer offers a number...

Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month...

Your job pays you only once a year for all the work you did over the...

Assume that you contribute $210 per month to a retirement plan for 15 years. Then you...

Consider the two savings plans below. Compare the balances in each plan after 8 years. Which...

Consider that you are 30 years old and have just changed to a new job. You have $91,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $400 each month into y

Your new job offers a savings plan that pays 1.00 percent in interest each month. You...

Homework Answers

Add Answer to: Your new job offers a savings plan that pays 1.00 percent in interest each month. You...

Post as a guest

Earn Coins

Add Answer to:
Your new job offers a savings plan that pays 1.00 percent in interest each month. You...