Answer:
The amount that will be in the account after 38 years is $ 36811,05
Step-by-step explanation:
a)
For resolved this exercise used the next equation
R(1-(1 + i)--) Ap = ... (1)
Ap = Amount in account
R = Paid monthly
i = Monthly interest rate
t = Months for paid
Dates
i=- 2.05% 12 = 0,1708% = 0.0017
The interest is divided for 12 because is annual and the formula is mensual
t = 15yearsx12 = 180 months
R = 220$
R(1-(1 + i)-) Ap =
220(1-(1 + 0.0017)-180) Ap = 0.0017
162,04 Ap=0.0017
Ap = 95321,855
The amount that will be in the account after 15 years is $ 95,321.85
b)
R(1-(1 + i)--) Ap = ... (1)
Ap = Amount in account
R = Paid monthly
i = Monthly interest rate
t = Months for paid
i=- 4,99% -= 0,415% = 0.0041
The interest is divided for 12 because is annual and the formula is mensual
t = 38yearsx12 = 456 months
R = 180$
R(1-(1 + i)-) Ap =
Ap = 180(1-(1 + 0.0041) -456 0.0041
Ap = 36811,055
The amount that will be in the account after 38 years is $ 36811,05
The total in the account with monthly contributions of $180 and employer matching of 25% at an interest rate of 4.99% for 38 years is $306,135.13.
The future value of an account equals the monthly contributions (periodic cash inflows) compounded at an interest rate in the future.
The future value can be determined by using the future value table or formula.
It can also be computed using an online finance calculator as below.
N (# of periods) = 456 months (12 x 38 years)
I/Y (Interest per year) = 4.99%
PV (Present Value) = $0
PMT (Periodic Payment) = $225 ($180 x 1.25)
Results:
FV = $306,135.13
Sum of all periodic payments = $102,600 ($225 x 456)
Total Interest = $203,535.13
Thus, the total in the account with monthly contributions of $180 and employer matching of 25% at an interest rate of 4.99% for 38 years is $306,135.13.
Learn more about determining the future value at https://brainly.com/question/24703884
