You are saving up to retire early. You plan to deposit $195 every week for 20...

You are saving up to retire early. You plan to deposit $195 every week for 20 years. If you think you can earn 8% per year on average, how much will you have in 20 years?

Solutions

Expert Solution

Future Value of an Ordinary Annuity
= C*[(1+i)^n-1]/i

Where,
C= Cash Flow per period =$195
i = interest rate per period =8%/52 =153846154%
n=number of period =52*20 =1040

= $195[ (1+0.00153846154)^1040 -1] /0.00153846154

= $195[ (1.00153846154)^1040 -1] /0.00153846154

= $195[ (4.9469 -1] /0.00153846154]

= $5,00,275.45

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

6. You are saving up to buy a car. If you deposit $125 a month, every...

6. You are saving up to buy a car. If you deposit $125 a month, every month, into a savings account earning 3% interest, compounded monthly, what is the balance after 2 years?

You are excited to start saving money. You plan to put $20 per week into an...

You are excited to start saving money. You plan to put $20 per week into an investment that you think will pay you 10.4% per year. You plan to make your first deposit today. How much will you have in 10 years? Suppose there are 52 weeks in a year. (Enter only numbers and decimals in your response. Round to 2 decimal places.)

to save the retirement plan, Dr lola plans to deposit $200 every month in a saving...

to save the retirement plan, Dr lola plans to deposit $200 every month in a saving account from next month for 10 years. the banks pays 6% interest rate compounding monthly. calculate the total balnce by the end of year 10

You begin saving for retirement at age 25, and you plan to retire at age 60....

You begin saving for retirement at age 25, and you plan to retire at age 60. You want to deposit a certain amount each month into an account that pays an APR of 3% compounded monthly. Make a table that shows the amount you must deposit each month in terms of the nest egg you desire to have when you retire. (Round your answers to the nearest cent.) Nest egg size Needed deposit $100,000 $ $200,000 $ $300,000 $ $400,000...

A month from now, you plan to begin saving for your retirement by making a deposit...

A month from now, you plan to begin saving for your retirement by making a deposit into a new savings account that has an expected return of 5% compounded monthly. You plan to continue depositing the same amount each month until you retire in 35 years. You expect to make withdrawals in the amount of $15,000 from your savings account every year for 40 years after you retire. Assume you were asked to find the amount you will need to...

You deposit $500 at the beginning of each month into your saving account every month. After...

You deposit $500 at the beginning of each month into your saving account every month. After five years (60 deposits total), your account value is $50,000. Assuming monthly compounding, what is your monthly rate that the bank provides? a. 1.22% b. 1.14 c. 1.43% d. 1.57%

Sam is saving for a trip to India. He will deposit a fixedamount every month...

Sam is saving for a trip to India. He will deposit a fixed amount every month in a bank account with an EAR of 7.5% starting today. If this account pays interest every month (monthly compounding) then how much should he deposit every month in order to have $10,000 in the account in two years' time?

You plan to deposit $25 in a bank every month at 5% interest, with the first...

You plan to deposit $25 in a bank every month at 5% interest, with the first payment made on your 18thbirthday and kept in the account for 5 years, your 23rd birthday, along with additional payments every month of $25. You will not make a payment on your 23rd birthday. Use Excel to make show how much you will have at the end of each month. How much will you have on your 23rd birthday?

You plan on saving $12,300 at the end of each of the next 20 years and...

You plan on saving $12,300 at the end of each of the next 20 years and investing your savings at an annual interest rate of 8%. At the end of year 20 you plan on retiring. You plan on leaving your savings in investments yielding an annual rate of 8% and withdrawing from savings a constant amount for the next 30 years commencing at the end of your first year of retirement. How large a withdrawal can you afford to...

You plan to retire in exactly 20 years. Your goal is to create a fund that...

You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the next 30 years between retirement and death (a psychic told you that you’d die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period. Required: d. Now assume that you will earn 10% from now through the...

Subjects