Question

Your employer contributes $100 a week to your retirement plan. Assume that you work for this employer for another 14 years and the applicable discount rate is 7.25%. Given these assumptions, what is this benefit worth to you today?

17. You anticipate being able to put away $1,800 at the end of each year into your 401(k) for each of the next 25 years (NOT $1,800 once but $1,800 in each year) and anticipate earning 8.5% per year on your investments. Assuming annual compounding and no distributions, how much do you expect to have in your 401(k) account after 25 years? 18. You are borrowing $21,000 with no money down to buy a car. The terms of the loan call for equal monthly payments for 5 years at 4.25% percent interest. What is the amount of each monthly payment?

Answer 1

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