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8. Future Value of Annuity. Twins Jacob and Jacquelyn graduated from college and started working in...

8. Future Value of Annuity. Twins Jacob and Jacquelyn graduated from college and started working in the family restaurant business at age 22. Each sibling developed their own plan to provide for their retirement. Both plans earned 8% and both siblings plan to retire at age 60.

  • Jacquelyn’s plan is to start immediately, invest $2,000 per year for 18 years. After 18 years, she will make no further contributions into the account.
  • Jacob plans to wait 13 years until he was 35 to open his individual retirement account. Jacob's plan is to invest $3,000 each year for the remaining 25 years until he retired at age 60.  

8.a. What were Jacquelyn's out of pocket contributions to her retirement account?

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8.b. What were Jacob's out of pocket contributions to his retirement account?   

5

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8.c. How much will Jacquelyn accumulate in her retirement account in total (cash investment and returns) by the time she is 60 years old?

5

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8.d. How much will Jacob accumulate in his retirement account in total (cash investment and returns) by the time he is 60 years old?

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jeff jeffy answered 1 year ago
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