Question

Susan saved $500 at the end of every month in her retirement account for 10 years (during age 25-35) and then quit saving. However, she did not make any withdrawal until she turned 65 (i.e., 30 years after she stopped saving). Her friend Cathy started saving $650 at the end of every month for 30 years during age 35 - 65. What will be the difference in accumulated balances in their retirement accounts at age 65 if both earned an average return of 10% (compounded monthly) during the entire period? $235,305 $121,015 $562,479 $31,591

Show work please

Answer 1

В $ 2,031,796 =FV(10%/12,10*12,-500,0,0)*((1+10%/12)^(30*12)) A 1 Susan account balance after 65 years 2 Less: 3 Cathy account balance after 65 years $ 1,469,317 =FV(10%/12,30*12,-650,0,0) Difference in 5 accumulated balances $562,479

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