Couple thinking about retirement plan

Assignment Help Financial Management

Reference no: EM131974296

1. A couple thinking about retirement decide to put aside $4,000 each year in a savings plan that earns 7% interest. In 10 years they will receive a gift of $20,000 that also can be invested.

a. How much money will they have accumulated 30 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Accumulated savings $

b. If their goal is to retire with $900,000 of savings, how much extra do they need to save every year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Additional annual savings needed $

2. You deposit $2,900 in your bank account.

a. If the bank pays 3% simple interest, how much will you accumulate in your account after 9 years?

Future value $

b. How much will you accumulate if the bank pays compound interest? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Future value $

Reference no: EM131974296

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