Question

1. Lulu started saving $200/month in a 401(k) earning 6% interest compounded monthly when she was 45 years old. How much will be in her account when she retires at age 65? 2. How much money did Lulu deposit into her account over the course of the 20 years? 3. What dollar amount of interest did her account earn? 4. Murphy started putting $100/month into his 401(k) earning 6% APR when he was 25 years old. How much will be in his account when he retires at age 65, if interest is compounded monthly? 5. How much money did Murphy deposit into his account over the course of the 40 years? 6. What dollar amount of interest did his account earn? 7. Murphy's account earned how much more interest than Lulu's account?

Answer 1

na mp cu magneti] A m Yin m = monthly payment re rate of interest = 64. na 12 timer lyears to 20 years 7 A: 200 (14 6 7 12x20 * 100*12) -1 6_ оох, 500 [ (in orta 3*] = 200 [clo 200 [ 30.05]. = 200 X 462 2$92,400 After retirement like will have $92,400 in account. monthly lulu deposits $ 200 30 yearly deke deposits = 124200 =f2400 So, for 20 years = 2400 x 20 -$48000 .

Interest Earned = Total amount - Amount deposited - $92, 400 -48,000 = $44, 400 Earns interest of $44,460 dulu