First compute the value of the retirement plan

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Reference no: EM131879521

Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first ten years, she contributes $3,500 per year. She increases the contribution rate to $5,500 per year in years 11 through 20. This is followed by increases to $10,500 per year in years 21 through 30 and to $15,500 per year for the last ten years. This money earns a 8 percent return.

First compute the value of the retirement plan when she turns age 65. (Round your answer to 2 decimal places.)

Value $

Compute the annual payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 7 percent. (Round your answer to 2 decimal places.)

Annual payment

Reference no: EM131879521

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