Question

 Suppose you want to save in order to purchase a new boat. Take the APR to be 6.0%.

 If you deposit $250 each month, how much will you have toward the purchase of a boat after three years? (Round your answer to the nearest cent.)

 You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $4300 per month. You have access to an account that pays an APR of 4.8% compounded monthly. 

 What size nest egg do you need to achieve the desired monthly yield? (Round your answer to the nearest cent.)

 You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $5000 per month. You have access to an account that pays an APR of 7.2% compounded monthly. This requires a nest egg of $694,841.38

 What monthly deposits are required to achieve the desired monthly yield at retirement? (Round your answer to the nearest cent.)

 We are considering the effects of starting early or late to save for retirement. Assume that each account considered has an APR of 6% compounded monthly.

 Against expert advice, you begin your retirement program at age 40. You plan to retire at the age of 65. What monthly contributions do you need to make to save up a nest egg of $207,999.63? (Round your answer to the nearest cent.)

Answer 1

Answer to Question CRAUDQL3 4.3.013:

Monthly deposit = $250

Annual interest rate = 6.00%
Monthly interest rate = 6.00% / 12
Monthly interest rate = 0.50%

Time period = 3 years or 36 months

Accumulated sum = $250*1.005^35 + $250*1.005^34 + …. + $250*1.005 + $250
Accumulated sum = $250 * (1.005^36 - 1) / 0.005
Accumulated sum = $250 * 39.336105
Accumulated sum = $9,834.03