Question

Stephanie is going to contribute $250 on the first of each month, starting today, to her retirement account. Her employer will provide a 50 percent match. In other words, her employer will add $125 to the amount Stephanie saves. If both Stephanie and her employer continue to do this and she can earn a monthly interest rate of .5 percent, how much will she have in her retirement account 25 years from now?

Answer 1

she have in her retirement account 25 years from now is $261172.09

Explanation:

given data

contribute principal P = $250

employer = 50 %

employer add = $125

interest rate = 0.5 % = 0.005

time = 25 year = 300 months

to find out

how much will she have in her retirement account 25 years from now

solution

here monthly payment = 250 + 125 = $375

we will apply here amount formula that is

amount = P ×
`((1+rate)^(time) - 1 )/(rate)` × ( 1 + rate )

put here value

amount = 375 ×
`((1+0.005)^(300) - 1 )/(0.005)` × ( 1 + 0.005 )

amount = 261172.09

so she have in her retirement account 25 years from now is $261172.09