Question

(1 point)
Problem 5 - Annuity Values on Any Date

Boyan is saving for her retirement. How much money will she accumulate by her 65th birthday based on the following saving patterns:

a) Saving $25,000.00 on each birthday starting on her 57th57th birthday and ending on her 64th birthday (inclusive), with i=4.7%
AV =  

b) Saving $1,000.00 per month starting one month after her 35th35th birthday and ending on the day of her 52th birthday(included), with i(12)=2.4%
AV =

Answer 1

a.

Number of deposit = 9 deposit (including 57 and begining and end of 64th year)

9th deposit is made on end of 64th year that is on 65th birthday.

Value at tim eof retirement is calculated in excel and screen shot provided below:

Total Saving at time of retirement on 65th birthday will be $272,281.80.

b.

Number of year of saving = 18 year (35th and 52nd year included)

monthly Saving = $1,000

value of saving at end of year 52 is calculated in excel and screen shot provided below:

value of saving at end of year 52 is $269,835.36.