Question

In: Finance

You are planning to make monthly deposits of $120 into a retirement account that pays 9...

You are planning to make monthly deposits of $120 into a retirement account that pays 9 percent annual interest (APR), compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 19 years?


rev: 09_17_2012

Multiple Choice

  • $71,900.73

  • $75,495.77

  • $66,266.58

  • $68,305.69

  • $862,808.76

Solutions

Expert Solution

PMT = $120
Rate = 9% / 12 = 0.75%
Nper = 19 * 12 = 228
PV = 0

Future value can be calculated by using the following excel formula:
=FV(rate,nper,pmt,pv)
=FV(0.75%,228,-120,0)
= $71,900.73

Amount at the end of 19 years = $71,900.73


Related Solutions

You are planning to make monthly deposits of $170 into a retirement account that pays 8...
You are planning to make monthly deposits of $170 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 21 years?
You are planning to make monthly deposits of $70 into a retirement account that pays 14...
You are planning to make monthly deposits of $70 into a retirement account that pays 14 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 22 years? $128,355.75, $1,466,922.82, $116,131.39, $122,243.57, $101,166.24
Suppose an investor plans to make monthly deposits into an account that pays 9% interest, compounded...
Suppose an investor plans to make monthly deposits into an account that pays 9% interest, compounded monthly, so that $100,000 will be in the account immediately after the payment at the end of Year 10. The first payment will occur at the end of Month 1 (one month from the present). How much must be deposited monthly?    A.   $517 per month    B.   $9,670 per month    C.   $6,580 per month    D.   $9,67 per month
1-Calculating Annuity Future Values. You are planning to make monthly deposits of $475 into a retirement...
1-Calculating Annuity Future Values. You are planning to make monthly deposits of $475 into a retirement account that pays 10 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 30 years? 2-Calculating Annuity Future Values. In the previous problem, suppose you make $5,700 annual deposits into the same retirement account. How large will your account balance be in 30 years?
You can afford monthly deposits of $130 into an account that pays 3.0% compounded monthly. How...
You can afford monthly deposits of $130 into an account that pays 3.0% compounded monthly. How long (in months) will it be until you have $11,400 to buy a boat?
You plan to make monthly deposits of $1,000 into an account at the beginning of each...
You plan to make monthly deposits of $1,000 into an account at the beginning of each month for the next 12 years. If you can earn 3.0% interest, what will your final balance be by the end of 12 years? Round to the nearest cent. ​[Hint: Beginning of period monthly cash flows!]
You plan to make monthly deposits of $1,000 into an account at the beginning of each...
You plan to make monthly deposits of $1,000 into an account at the beginning of each month for the next 11 years. If you can earn 3.4% interest, what will your final balance be by the end of 11 years? Round to the nearest cent. ​[Hint: Beginning of period monthly cash flows!]
Laquita deposits $5500 in her retirement account every year. If her account pays an average 6%...
Laquita deposits $5500 in her retirement account every year. If her account pays an average 6% interest and she makes 38 deposits before she retires, how much monet can she withdraw in 20 equal payments beginning one year after her last deposit? please show cash flow diagram and solve NOT with excel but with the interest rate formula equations!!!
Suppose your retirement account pays 9% APR compounded monthly. a. What size nest egg do we...
Suppose your retirement account pays 9% APR compounded monthly. a. What size nest egg do we need in order to retire with a 25 year annuity that yields $500 per month? b What size nest egg do we need in order to retire with a 25 year annuity that yields $700 per month? You estimate you can save $150 per month for a down payment on a car. You hope to purchase the car in 24 months. You invest this...
Ken planned to make monthly deposits in to a saving account at a nominal rate of...
Ken planned to make monthly deposits in to a saving account at a nominal rate of 3% compounded monthly for 180 months. The amount of deposit is k at the end of the k th month, where k = 1, 2, ..., 180. However, he was unemployed for a short period of time, so he missed the 1st through 9th payments. He made the rest of the payments as planned. How much does Ken have in his saving account at...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT