Question

x x A.wy. A E DE 1 Normal 1 No Spac.. Hdbull AdDDEL Hab AaB Heading 1 Heading 2 Title Sul Font Paragraph Styles Assume you are 25 and earn $30.600 per year, never expect to receive a raise and plan to retire at age 55. If you Invest 5 percent of your salary in a 401(k) plan returning 11 percent annualy, and the company provides a $0.50 per $1.00 match on your contributions up to 3 percent of salary, what is the estimated future value of your 401(k) account? Once you retire, how much can you withdraw monthly you want to deplete your account over 30 years? Click the table kon to view the future valve annuity table and to view the present value annuity table click this table icon The estimated tuture values Round to the nearest cent) 1 2 3 4 5 6 1.000 2050 3153 1.000 2.140 3.440 5526 6802 1000 2060 3184 4 375 5.637 6.975 394 9897 11 491 13.181 14.972 16.870 18.882 7% 1000 2070 3215 4440 5.751 7.153 8.654 10.250 11978 13 816 15784 17 86 20141 Compound Sum of an Annuity of $1 (FIFA) 8% 9% 10% 11% 1.000 1000 1.000 1000 2080 2090 2100 2.110 3246 3.276 3310 3342 4.506 4573 4641 4710 5867 5985 6.105 6228 7336 7523 7.716 7913 8.923 9 200 9487 9.783 10637 11 028 11.859 12.488 13021 13579 14 164 14 487 15.193 15 937 16.722 16 645 1760 18.531 19.561 18977 20.141 21 384 22713 21 495 22 953 24523 26 212 12% 1.000 2120 3374 4.779 6 353 8.115 10 089 12 300 14.776 17 549 20655 24133 28 029 13% 1.000 2130 3407 4,850 6.480 3323 10.405 12.757 15 416 18 420 21.814 9 10 11 11027 12 570 14207 15.917 17.713 6610 8.536 10.730 13233 16 005 19337 23.045 27271 32009 29 985 195 24215 21 015 23276 25673 22550 25 129 15 16 350 23651 25015 29361 33.00 3397 30324 33.750 3.450 27.975 3177 55550 4545 25596 5.15 40417 486 30 340 339 37 379 4099 3293 37.280 42 153 45884 5550 30 095 34405 39 190 44501 50.19 5690 54203 30 500 33760 3570 39993 3304 35719 38.505 20 21 22 23 124 ST 6400 81210 46 51 160 56 76 62873 695 767 24.01 2599 5042 55457 GOES 66765 73100 49000 5343 58 177 63243 5446 1596 006 544 47 23 353 120 00 209 30 10 5 2730 3163

Answer 1

		Annual Salary	$30,600
		Annual Saving=5%*30600=	$1,530
		Emplyer match =0.5*1530=	$765	(Maximum 3%*30600)=	$918
		Total Deposit per year=1530+765	$2,295
		Number of Years	30
		Interest rate	11%
		Compound sum of annuity $1 per year			$191.25
		For n=30, and 11% interest	$199.021
		Estimated Future Value=2295*199.021	$456,752.91
		AMOUNT THAT CAN BE WITHDRAWN MONTHLY FOR 30 YEARS
	Rate	Monthly interest=(11/12)%=	0.91667%
	Nper	Number of months of withdrawal=30*12	360
	Pv	Amount in retirement account	$456,752.91
	PMT	Monthly withdrawal	$4,349.76
		(Using PMT function of excel)
		IF YOU USE PRESENT VALUE OF ANNUITY TABLE
		Present Value of $1 annuity per year
		Forn=30, and 11% interest	$8.694
		Annual withdrwal =456752.91/8.694=	$52,537.82
		Monthly withdrawal=52537.82/12=	$4,378.15
		NOTE: As per Chegg guidelines, only one question should be answered
								1 Clipboard Font Alignment Number G20 X fo EPMT(G17,618,-619) A B C D E H - F Estimated Future Value=2295*199.021 G $456,752.91 13 14 Сл AMOUNT THAT CAN BE WITHDRAWN MONTHLY FOR 30 YEARS 16 17 Rate 18 Nper Pv PMT 19 Monthly interest=(11/12)%= Number of months of withdrawal=30*12 Amount in retirement account Monthly withdrawal (Using PMT function of excel) 0.91667% 360 $456,752.91 $4,349.76 20 21 22