You are 21 years old today. Starting one month from now, if you deposit $500 per...

You are 21 years old today. Starting one month from now, if you deposit $500 per month for 32 years into your retirement account which earns 0.7 percent per month, are you a millionaire by age of 53? Find out how much money you will have by age of 53. If that number is greater than one million, then you are a millionaire by that age.

Solutions

Expert Solution

Information provided:

Monthly deposit= $500

Interest rate= 0.7% per month

Time= 53 years - 21 years = 32 years*12 = 384 months

The question is solved by computing the future value.

Enter the below in a financial calculator to compute the future value:

PMT= -500

I/Y= 0.7

N= 384

Press the CPT key and FV to compute the future value.

The value obtained is 958,943.43.

Therefore, I will not be a millionaire by age 53 since the amount in the retirement account will have less than one million.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

You rent out an apartment for 15 years, with rent starting at $500 per month and...

You rent out an apartment for 15 years, with rent starting at $500 per month and increasing 3% each year. Immediately after receiving rent payments you deposit the rent payment into an account with i(12) = .06. If there are no other deposits or withdrawals into this account then how much is in the account after the 15 year period?

You plan to save $340 per month starting today for the next 43 years "just to...

You plan to save $340 per month starting today for the next 43 years "just to start the month off right." You feel that you can earn an interest rate of 10 percent compounded monthly. How much will there be in the account 43 years from today?

How much do you have to deposit today so that beginning 11 years from now you...

How much do you have to deposit today so that beginning 11 years from now you can withdraw $12,000 a year for the next 8 years (periods 11 through 18) plus an additional amount of $24,000 in the last year (period 18)? Assume an interest rate of 11 percent.

How much do you have to deposit today so that, beginning 11 years from now, you...

How much do you have to deposit today so that, beginning 11 years from now, you can withdraw $9,000 a year for the next 8 years (periods 11 through 18) plus an additional amount of $18,000 in the last year (period 18)? Assume an interest rate of 6%.

How much do you have to deposit today so that beginning 11 years from now you...

How much do you have to deposit today so that beginning 11 years from now you can withdraw ?$9,000 a year for the next 5 years? (periods 11 through 15?) plus an additional amount of $18,000 in the last year? (period 15?)? Assume an interest rate of 9 percent.

You borrow $7,000 today and promise to repay the loan over the next three years with 36 equal, end-of-month payments starting one month from today.

You borrow $7,000 today and promise to repay the loan over the next three years with 36 equal, end-of-month payments starting one month from today. The interest rate is 4% APR compounded monthly. What is the amount of each payment? Round only your final answer to two decimal places.• $206.67• $194.44• $214.98• $202.19• $223.86

If Tony deposits $1,000 three years from now and then increases the deposit by $500 each...

If Tony deposits $1,000 three years from now and then increases the deposit by $500 each year through year 10, calculate the amount that will be in the account in year 10 at an interest rate of 10% per year.

4. Find the value twenty years from now of a $10,000 deposit today at an annual...

4. Find the value twenty years from now of a $10,000 deposit today at an annual interest rate of 0.1% per year if the interest on the account compounds daily.

If you deposit $500 per month into an investment account that pays interest at a rate...

If you deposit $500 per month into an investment account that pays interest at a rate of 8% per month, compounded quarterly, how much will be in the account at the end of 5 years? There is no interperiod compounding. (for full credit show cash flow diagram) (25 points)

Suppose that you are 21 years old, and making retirement plans. You are starting to contribute...

Suppose that you are 21 years old, and making retirement plans. You are starting to contribute $800 per month to your retirement account at the beginning of each month. You intend to do so until the age of sixty three and then stop the contributions. You will retire at age 67. You receive a 5% APR compounded monthly on your account. How much will you have if you allow interest to accrue to age 67? (K means 1,000's) Group of...

Subjects