You are saving for retirement. Starting this month, you will deposit $600 per month into a...

You are saving for retirement. Starting this month, you will deposit $600 per month into a stock account that earns 9% interest. In ten years, you will begin depositing an additional $350 per month into a bond account that earns 6% interest. You expect interest rates to shift upwards 1.5% 20 years from now. This means, at that point, each of the accounts listed above will earn interest 1.5% higher than before. How much will you have when you retire if you plan to retire in 37 years?

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Expert Solution

Stock account
FV after 20 years	$400,732.12
FV after 37 years	$2,706,649.60

Bond Account
FV after 20 years	$57,357.77
FV after 37 years	$348,067.15

Total amount on retirement	$3,054,716.75

jeff jeffy answered 3 weeks ago

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