Question

You annually invest $1,000 in an individual retirement account (IRA) starting at the age of 20 and make the contributions for 15 years. Your twin sister does the same starting at age 35 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 60? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar. Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 60? the larger amount.

Answer 1

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APPENDIX NOT PROVIDED. I HAVE USED ONE WHICH I HAVE. ALL FV FACTORS ARE ROUNDED TILL 4 DECIMALS

1 Ale $ W 2 v 1* ENG 01:13 18-02-2020 10 X EN271 X - EH Fax EL EJ Ekormula Bar EL EM E N EO EP E 267 YOU 268 269 270 RATE YEARS 1000 7.00% 15 273 VALUE AT THE END OF 15 YEARS = AX FVIFA @7%, 15 YEARS VALUE AT THE END OF 15 YEARS = 1000 X FVIFA @7%, 15 YEARS VALUE AT THE END OF 15 YEARS = 25129 (1000 X 25.1290] 277 278 279 280 281 PRESENT VALUE 25129.00 (THIS AMOUNT WILL REMAIN INVESTED FOR 25 MORE YEARS] RATE 7.00% YEARS 25 AMOUNT AT AGE 60 = PV X FVIF @7%, 25 YEARS AMOUNT AT AGE 60 = 25129 X FVIF @7%, 25 YEARS AMOUNT AT AGE 60 = 136385 (25129 X 5.4274] answer 1 282 283 284 286 287 25 288 YOUR SISTER Invests for 25 years 1000 RATE 7.00% YEARS VALUE AT THE END OF 60 YEARS = AX FVIFA @7%, 25 YEARS AMOUNT AT AGE 60 = 1000 X FVIFA @7%, 25 YEARS answer 2 AMOUNT AT AGE 60 = 63249 [10000 X 63.2490] ... CAP STRU VALUE PM, PMT loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPONPER APR CPI 289 290 ear FVA 52 pva | 53 STATE 56 ... I

1 Ale $ w 2 v 1* ENG 01:14 18-02-2020 10 X * EN314 2 . EH fix EL EJ EK EL EM EN EO EPE 291 292 ANSWER YOU HAVE LARGER AMOUNT LARGER AMOUNT = 293 136385 294 295 296 297 298 299 300 301 303 306 307 308 309 310 311 312 313 314 ... CAP STRU VALUE PM, PMT loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA 52 pva 3 STATE 56 ... :