Question
In: Economics
*SOLVE IN EXCEL* Sondra deposits $5,500 in an IRA account on April 15, 2019. Assume the...
*SOLVE IN EXCEL*
Sondra deposits $5,500 in an IRA account on April 15, 2019. Assume the account will earn 3% annually. If she repeats this for the next nineteen years (for a total of twenty contributions), how much will she have on deposit on April 14, 2039?
Solutions
Expert Solution
Answer: $ 152,220.67
Excel Table:
| Year | Amount Deposited at April 15 | Balance at April 15 | Interest Rate (%) | Interest on 'Balance at April 15' | Balance at April 14 (of Next Year) |
| 2019 | 5500.00 | 5500.00 | 3% | 165.00 | 5665.00 |
| 2020 | 5500.00 | 11165.00 | 3% | 334.95 | 11499.95 |
| 2021 | 5500.00 | 16999.95 | 3% | 510.00 | 17509.95 |
| 2022 | 5500.00 | 23009.95 | 3% | 690.30 | 23700.25 |
| 2023 | 5500.00 | 29200.25 | 3% | 876.01 | 30076.25 |
| 2024 | 5500.00 | 35576.25 | 3% | 1067.29 | 36643.54 |
| 2025 | 5500.00 | 42143.54 | 3% | 1264.31 | 43407.85 |
| 2026 | 5500.00 | 48907.85 | 3% | 1467.24 | 50375.08 |
| 2027 | 5500.00 | 55875.08 | 3% | 1676.25 | 57551.34 |
| 2028 | 5500.00 | 63051.34 | 3% | 1891.54 | 64942.88 |
| 2029 | 5500.00 | 70442.88 | 3% | 2113.29 | 72556.16 |
| 2030 | 5500.00 | 78056.16 | 3% | 2341.68 | 80397.85 |
| 2031 | 5500.00 | 85897.85 | 3% | 2576.94 | 88474.78 |
| 2032 | 5500.00 | 93974.78 | 3% | 2819.24 | 96794.03 |
| 2033 | 5500.00 | 102294.03 | 3% | 3068.82 | 105362.85 |
| 2034 | 5500.00 | 110862.85 | 3% | 3325.89 | 114188.73 |
| 2035 | 5500.00 | 119688.73 | 3% | 3590.66 | 123279.39 |
| 2036 | 5500.00 | 128779.39 | 3% | 3863.38 | 132642.78 |
| 2037 | 5500.00 | 138142.78 | 3% | 4144.28 | 142287.06 |
| 2038 | 5500.00 | 147787.06 | 3% | 4433.61 | 152220.67 |
Explanation:
Step 1. Amount deposited on April 15, 2019 = $ 5,500. So, Balance on April 15, 2019 = $ 5,500.
Step 2. Interest on this amount @ 3 % = $ 5,500 x 3 / 100 = $ 165.00
Step 3. So, Balance at April 14, 2020 = Balance at April 15, 2019 + Interest on "Balance at April 15, 2019"
= $ 5, 500 + $ 165
Balance at April 14, 2020 = $ 5,665.00
Step 4. Amount deposited on April 15, 2020 = $ 5,500.
So, Balance on April 15, 2020 = Balance at April 14, 2020 + Amount deposited on April 15, 2020
= $ 5,665.00 + $ 5,500.00
Balance on April 15, 2020 = $ 11,165.00
Interest on this amount @ 3 % = $ 11,165 x 3 / 100 = $ 334.95
So, Balance at April 14, 2021 = Balance at April 15, 2020 + Interest on "Balance at April 15, 2020"
= $ 11,165 + $ 334.95
Balance at April 14, 2021 = $ 11,499.95
Step 5. Repeat the step 4 for each year. We get Balance on April 14, 2039 = $ 152,220.67
Rahul Sunny answered 2 years agoRelated Solutions
Sondra deposits $2,600 in an IRA account on April 15, 2021. Assume the account will earn...
Sondra deposits $2,600 in an IRA account on April 15, 2021.
Assume the account will earn 3% annually. If she repeats this for
the next 13 years, how much will she have on deposit on April 14,
2034?
Multiple Choice
$46,007.
$50,189.
$41,824.
$43,916.
You plan to make 15 deposits at the end of each year in an account that...
You plan to make 15 deposits at the end of each year in an
account that pays 6% compound interest annually. If the first
deposit is $ 1,000 and subsequently 500 are added each year to the
amount deposited the previous year (1000, 1500, ...), the amount of
the account at the end of the 15 years will be close to:
a. $71,550
b. $97,777
c. $92,242
d. $87,021
e.No correct answer is provided.
a) Assume that yesterday (April 22, 2020) the interest rate on dollar deposits in the U.S....
a) Assume that yesterday (April 22, 2020) the interest rate on
dollar deposits in the U.S. was 0.02 (2%) per year and the interest
rate on euro deposits was 0.02 (2%) per year. Investors yesterday
expected that the exchange rate in one year (April 22, 2021) will
be 2.02 dollars for one euro.
What was the current exchange rate in terms of dollars
per euro yesterday (April 22, 2020)?
Illustrate your answer, using a graph with the rates of return...
A) Assume that you wish to make annual deposits into a savings account. The interest rate...
A) Assume that you wish to make annual deposits into a savings
account. The interest rate offered by the bank is 11%, and you plan
to save for the next 12 years. If your goal is for the present
value of your savings to be equal to $4,058, how much money must
you deposit every year?
B) Assume you've just received a bonus at work of $3,812. You
deposit that money in the bank today, where it will earn interest...
if someone deposits $150 into a bank account that earns 15% every year and withdraw thier...
if
someone deposits $150 into a bank account that earns 15% every year
and withdraw thier interest every year for 2 years, how much
interest do they collect in thise years?
step by step how to do it
need to solve it on excel as soon as possible Assume that three business owners each...
need to solve it on excel as soon as possible
Assume that three business owners each own an
identical storage building valued at $120,000.
Assume that there is a 1% chance in any year each building
will be destroyed by a peril (fire), and that a loss to any of the
buildings is an independent event. Assuming that:
(first case ) Fire events are independent of each other
(second case) Each building faces the same types of risks and
environmental...
Victoria's 2019 tax return was due on April 15, 2020, but she did not file it...
Victoria's 2019 tax return was due on April 15, 2020, but she
did not file it until June 12, 2020. Victoria did not file an
extension. The tax due on the tax return when filed was $10,000. In
2019, Victoria paid in $16,500 through withholding. Her 2018 tax
liability was $14,500. Victoria’s AGI for 2019 is less than
$150,000. How much penalty will Victoria have to pay (disregard
interest)?
A business machine purchased April 10, 2017, for $98,000. On August 15, 2019, the machine was...
A business machine purchased April 10, 2017, for $98,000. On
August 15, 2019, the machine was fully deprecated and sold for
$67,000.
a) What is the amount of the gain or loss from the sale of the
machine?
b) What is the nature/character of the gain or loss from the
sale of the machine?
Jessica has a margin account in which she deposits $300,000 (Equity). Assume that the initial margin...
Jessica has a margin account in which she deposits $300,000
(Equity). Assume that the initial margin requirement is 50% and
that the margin maintenance is 15%. Jessica is planning to invest
(long) in Ford stock which is currently selling at $40/share. a)
Show that Jessica could purchase 15,000 shares, using the maximum
allowable margin. b) Assume that the broker charges 5% annual
interest rate, assume that the broker's fees are 0.3% of the total
amount paid for the purchase and...
Make an Excel model for a superannuation account. For simplicity, assume the rate is (2%) Make...
Make an Excel model for a superannuation account. For
simplicity, assume the rate is (2%)
Make the following inputs.
a. Age (an integer)
c. Desired superannuation withdrawal amount (in dollars)
d. Desired annual income for ages 65 to 85, inclusive (males),
Assume this annual amount is paid on each birthday, starting at age
65, and ending at 85. This stream of annual payments is what we
refer to below as the user’s retirement income stream.
The spreadsheet will then generate...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- urgent please, in operating system: One simple method to protect a critical section is to use...
- Andretti Company has a single product called a Dak. The company normally produces and sells 120,000...
- A projectile is fired from ground level at an angle of 63 degree above the horizontal...
- Find and share an advertisement that looks interesting and persuasive. Describe why you pick up the...
- Why are grammatical mistakes that all children make as they acquire language important to psycholinguistics? What do...
- Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income...
- Problem 5-22 Yield to Maturity and Yield to Call Arnot International's bonds have a current market...
ADVERTISEMENT