Explain the results in terms of time value of money

Assignment Help Business Management

Reference no: EM132579809

Larry and Beth are both married, working adults. They both plan for retirement and consider the $6,000 annual contribution a must.

First, consider Beth's savings. She began working at age 20 and began making an annual contribution to her IRA of $6,000 each year until age 32 (12 contributions). She then left full time work to have children and be a stay at home mom. She left her IRA invested and plans to begin drawing from her IRA when she is 65.

Larry started contributing to his IRA at age 32. The first 12 years of his working career, he used his discretionary income to buy a home, upgrade the family cars, take vacations, and pursue his golfing hobby. At age 32, he made his first $6,000 contribution to an IRA, and contributed $6,000 every year up until age 65 (33 contributions). He plans to retire at age 65 and make withdrawals from his IRA.

Both IRA accounts grow at an 8% annual rate. Do not consider any tax or inflation effect.

1. Create a chart summarizing the details of the investment for both Larry and Beth.

2. Explain the results in terms of time value of money. (Hint: discuss why one person was able to save a great deal more that the other.

Reference no: EM132579809

Questions Cloud

Discuss ethical issues relevant to the collected examples : Discuss ethical issues relevant to the collected examples, as well as your own persuasive plan. Apply this insight to your own personal or professional life.

BAMG1207 Principles of Management Assignment : BAMG1207 Principles of Management Assignment Help and Solution - Higher College Of Technology, Oman - Assessment Writing Service

Summarize accounts that will be reported on gdc statement : Summarize the accounts and amounts (excluding cash) that will be reported on GDC's statement of financial position as at December 31, 20X6

Risk management plan is comprised of set of procedures : Risk management plan is comprised of a set of procedures that are brought into execution whenever things go out of proportion in an industry expectedly

Explain the results in terms of time value of money : Create a chart summarizing the details of the investment for both Larry and Beth. Explain the results in terms of time value of money.

Discuss the measurement of the building in parit permai : Discuss the measurement of the building in Parit Permai based on the relevant Malaysian Financial Reporting Standard. Indicate the impairment loss

Describe potential social and cultural influences : Identify at least 10 behaviors in which you engage that are due to conformity or obedience. Strive to identify less obvious examples that will allow.

Illustrate journal entry for the transaction as at december : Illustrate journal entry for the above transaction as at 31 December 2019.Indicate the gain or loss on foreign exchange as at 31 December 2019.

Annual Review-Jim performance issues : Explain how you will address Jim's recent performance issues.

User Account

All Pages