Question

Your cient is 30 years old. She wants to begin saving for retirement, with the first pyyment to come one year from now, she can save s4,000 per weac, and you advise her to inveu it in the stock market, which you expect to provide an average return of 9% in the future.

a. If she follows your advice, how much money will the have at 657 Do not rectod intermediate calcilations. Alound your answer to the nearest cent: 4
b. How much will sthe hove at 70? Do not round entermediate calculations. Aound your answer to the nearest cent. 5
c. She expects to loe for 20 years if she retires at 65 and for 15 yeats if che retires at 70 . If her itrestments contanue to earn the alme rite, how much mill ahe be able to mithdrak at the rend of each year after rebirement at each retirement age? Do not round insermodiate catculbions, Round your answeis to the nearest cent. Ancual whitrawals if she retires at 65:3 Ancyal withdrawals if she retires at 701$

Answer 1

To calculate the future value of the investment, use the formula for compound interest: Future Value = Present Value * (1 + Interest Rate)^Number of Periods. In this case, the Present Value is $4,000, the Interest Rate is 9%, and the Number of Periods is 30 years (or 30*52 weeks).

Step-by-step explanation:

To calculate the future value of the investment, we can use the formula for compound interest:

Future Value = Present Value * (1 + Interest Rate)^Number of Periods.

In this case, the Present Value is $4,000 (which is the weekly savings), the Interest Rate is 9% (or 0.09), and the Number of Periods is 30 years (or 30*52 weeks).

So, the future value of the investment at age 65 would be:

Future Value = $4,000 * (1 + 0.09)^(30 * 52)