Find how much will be in the account when you retire

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Reference no: EM13232961

You enroll in a thrift plan in which you are allowed to contribute 8% of your pretax salary per year. The company contributes an additional 6%. Your starting salary is $62,500 and you can expect annual increases of 3.5%. Use an interest rate of 7.25% in all your calculations.

a. How much money will be in your thrift plan account when you retire after 44 years of participation?

b. If you start your deposits 16 years later, how much will be in the account when you retire? How does this compare with the results of a. above?

c. If you retire using the accumulation calculated in part a. above to fund 20 years of retirement, calculate the equal annual payment for those 20 years.

d. If you decide to allow for inflation by increasing the payments by $10,000 each year, calculate the first and the twentieth annual payments

Reference no: EM13232961

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