Question

In: Finance

You start saving $1,000 at the end of this year and increase your saving by 2%...


You start saving $1,000 at the end of this year and increase your saving by 2% every year for 21 years. Your account earns 15%. How much will you have in your account in 21 years?

Solutions

Expert Solution

P[(1+r)^n - (1+g)^n] / (r-g)

here,

P = 1000

r=15%=>0.15.

g=2%=>0.02.

n=21

=>1000*[(1.15)^21 -(1.02)^21]/(0.15-0.02)

=>1000*[17.3058517/0.13]

=>1000*133.121936

=>$133,121.94.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

You start saving $1,000 at the end of this year and increase your saving by 5%...
You start saving $1,000 at the end of this year and increase your saving by 5% every year for 18 years. Your account earns 13%. How much will you have in your account in 18 years?
2.You decide to start saving for your retirement, in 25 years time. Today you make an...
2.You decide to start saving for your retirement, in 25 years time. Today you make an initial lump sum payment of 10,000, then decide to save 500 per semester and expect an average return of 6.6%(comp.semesterly or semiannually). How much will you have in the end, assuming you pay the money in the beginning of each semester? 3.Your bank has just launched a savings scheme which pays an interest at 5.15% monthly compounded, over 10 years. If you invest 100...
Suppose you start saving for retirement by depositing $4,000 EVERY YEAR into your retirement account. If...
Suppose you start saving for retirement by depositing $4,000 EVERY YEAR into your retirement account. If your annual return is 8%, how much will you have in 45 years? How much would you have if all deposits were made on the FIRST of the year (as opposed to the last day of the year)? (please solve by hand and not excel)
MF has decided to start saving for his retirement. He will start at the end of...
MF has decided to start saving for his retirement. He will start at the end of this year saving $2000 a year for 10 years and $5,000 a year for the next 15 years after that. When he has finished with this period, he will still have 10 years left until he retires. The interest rate before retirement is 9.5% interest per year. After he retires the expected interest rate is 8%. If he wants to withdraw from his account...
You start a corporation. Your idea will produce $100K at the end of each year for...
You start a corporation. Your idea will produce $100K at the end of each year for 20 years. After 20 years you will sell all assets – this will produce an additional $1.2 million at year 20. To begin production you need $500K immediately which you will raise by issuing bonds and stock. You issue a 20 year bond with 4% annual coupon and face value $1 million. YTM on bonds is 14%, stockholders also require 14% return. No cash...
You are 25 years old and decide to start saving for your retirement. You plan to...
You are 25 years old and decide to start saving for your retirement. You plan to save $3000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 65. Suppose you earn 10% per year on your retirement savings. How much will you have saved for retirement? How much will you have saved if you wait until age 35 to start saving (again,...
You are 25 years old and decide to start saving for your retirement. You plan to...
You are 25 years old and decide to start saving for your retirement. You plan to save $5,000 at the end of each year​ (so the first deposit will be one year from​ now), and will make the last deposit when you retire at age 65. Suppose you earn 8% per year on your retirement savings. a. How much will you have saved for​ retirement? The amount that you will have accumulated for retirement is _____ b. How much will...
Your friend tells you that she wants to start saving for retirement by investing in the...
Your friend tells you that she wants to start saving for retirement by investing in the stock market. Given that you have taken this finance class, she asks you for advice about what stocks she should buy. What would you tell her?
When you take your first job, you decide to start saving right away for your retirement....
When you take your first job, you decide to start saving right away for your retirement. You put $5,000 per year into a saving plan, which interest rate 10% per year. Five years later, you move to another job and stop making contributions to the saving plan. If the first plan continued to earn interest for another 35 years, determine the future worth in year 40. $81,954 $89,154 $857,840 $859,840
You want to start saving money for your retirement. You want toretire in 35 years...
You want to start saving money for your retirement. You want to retire in 35 years and think you will need to accumulate $1,500,000 to maintain your desired lifestyle after you retire. If you are confident you will be generating 6% annual rate of return, how much do you have to save each month?Group of answer choices$1,121.73$712.74$1,052.85$8,552.85
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT