Question

You just turned 22 years old and want to retire when you turn 65. You plan...

You just turned 22 years old and want to retire when you turn 65. You plan to put $3,500 every year into a ROTH IRA, a retirement account from which you can withdraw money after retirement without having to pay any taxes. You expect to earn a return of 6% on your investments every year.

Attempt 1/5 for 12 pts. Part 1 How much money can you expect to have at age 65 if you make your first annual deposit now and your last one on the day you turn 64?

Attempt 1/5 for 10 pts. Part 2 How much money can you expect to have at age 65 if you make your first deposit 10 years from now (at age 32) and your last one on the day you turn 64?

You borrowed $600,000 at an interest rate of 3.1%, with constant annual payments of both principal and interest over 15 years. What is the outstanding balance after 6 years?

You expect to receive two cash flows: $38,000 paid in 5 years and $57,000 paid in 10 years. The annual interest rate is 7%. What is the future value of the combined cash flows, in 15 years?

You have $4,000 in your savings account, and want to buy a car for $20,000.

If you are not earning any more money and the interest rate on your savings account is 6% per year, how many years do you have to wait before you can buy the car?

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