Question

A) A deposit of $1,100 is planned for the end of each year into an account paying 10%/year compounded annually. The deposits were not made for the 10th and 11th years. All other deposits were made as planned. What amount will be in the account after the deposit at the end of year 25?

B)  Financial planners (and engineering economists) unanimously encourage people to seek out the highest rate of return possible within their personal level of risk tolerance. To illustrate this point, they frequently produce a table similar to the one below. Fill in the blank cells in this table assuming that your goal is to have $1,100,000on your 65th birthday and that deposits start on your 26th birthday and continue annually in the same amount on each birthday up to and including your 65th birthday. What is the amount of required annual deposit for each interest rate earned? 4%/year? 5%/year? 6%/year? 7%/year? 8%/year? 9%/year?

Answer 1