How much money will jamaal and miya have

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Jamaal and Miya are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $2400 per year to prepare for retirement. Miya just told Jamaal, though, that she had heard that they would actually have more money the day they retire if they put $2400 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments - then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Jamaal and Miya make an informed decision:

Assume that all payments are made at the END a year (or month), and that the rate of return on all yearly investments will be 8.4% annually.

Problem 1: How much money will Jamaal and Miya have in 45 years if they put $2400 per year away for each of the next 45 years?

Problem 2: How much money will Jamaal and Miya have in 45 years if they put away $200 per MONTH at the end of each month for the next 45 years? (Remember to adjust 8.4% annual rate to a Rate per month!)

 

Reference no: EM132995695

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