Investment banker with starting annual salary

Assignment Help Financial Management

Reference no: EM13846884

Sarah started working as an investment banker with a starting annual salary of $84,000 on January 1, 2014. She receives her salary in equal monthly instalments at the end of each month. She expects to receive a 4% raise every year until she retires after 30 years of hard work (i.e. she will receive monthly paycheques of $7,000 at the end of each month in 2014, $7,000 × 1.04 at the end of every month in 2015, and so on). As part of her benefits package her employer offers to put in 5% of her monthly paycheque into a retirement savings account as long as she puts in an equal amount at the same time (so if she puts $350 = 0.05 × $7,000 into the retirement account form her own salary at the end of this month, her employer will match that amount by an additional $350 so in total, $700 will be deposited into her retirement account on January 31, 2014). Assuming she will continue to contribute exactly 5% every month for 30 years, how much money will Sarah have in her retirement account by the time she retires? (Her last work day and paycheque will fall on December 31st, so assume she and her employer make one last payment into the account and then she checks her balance.) Sarah earns 6.6% (APR, compounded monthly) interest on funds invested in her retirement account.

Show all work please

Step by step

Does not use excel please?

Explain the question with words not just numbers

Reference no: EM13846884

Questions Cloud

Explain the advantages and disadvantages of the supply chai : 1.Explain the advantages and disadvantages of the supply chain used in the Japanese auto industry before the March 11 earthquake and tsunami.2.Evaluate whether or not Toyota's plan for a "foolproof" supply chain is consistent with the Lean production..

What is the present value of his inheritance : His recently departed dear Aunt Annie, may she rest in peace, has left Tom a 6-year annuity paying $4,500 per year. He will receive the first payment 4 years from today. If he is discounting at 7% (EAR), what is the present value of his inheritance?

Write an essay on positive and negative social behavior : Write an essay of 750-1,000 words on one of the following modules- Attitudes and Social Cognition, Social Influence and Groups, Prejudice and Discrimination and Positive and Negative Social Behavior

What are cognitive distortions : What are cognitive distortions - Create a scenario that describes an individual who is suffering from cognitive distortions. Make the scenario as detailed and realistic as possible.

Investment banker with starting annual salary : Sarah started working as an investment banker with a starting annual salary of $84,000 on January 1, 2014. She receives her salary in equal monthly instalments at the end of each month. Assuming she will continue to contribute exactly 5% every month ..

Analyze the conflicts of interest that can arise between own : analyze the conflicts of interest that can arise between owners and managers

Automatic savings plan-right after the last contribution : You enter into an automatic savings plan with RBC where $1250 is deducted from your paycheck at the end of each quarter starting on March 31, 2014 (first payment) to December 31, 2019 (last payment). If the account pays 8% (APR, monthly compounded), ..

What is the effective annual rate bank used : Lloyd Blankfein would like to supplement his low pension paid by his employer Goldman Sacks. His personal banker Jamie Dimon told him that he could pay $1,000 every month for ten years (making 10 × 12 = 120 payments at the end of each month until her..

Prepare summary journal entries in all appropriate funds : Prepare summary journal entries in all appropriate funds. Prepare alternative journal entries to re?ect how the transactions would be recorded in the township'sgovernment-wide statements.

User Account

All Pages