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

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