Question

You have recently signed up for a new job and noticed this policy for retirement savings. Invest $200 and the employer does 70% matching for 35 years at an interest rate of 4.8%.

Find the total amount that the employer contributes each month.

What amount will you have after 35 years?

How much money have you deposited into the account yourself?

How much more money is in the account than what you have deposited?

Answer 1

To find the employer's contribution each month, calculate 70% of the monthly investment. Use the compound interest formula to calculate the amount you will have after 35 years. Multiply your monthly investment by the number of months in 35 years to determine how much money you have deposited. Find out the difference between the total amount and your deposit to know how much more money is in the account.

Step-by-step explanation:

To find the total amount that the employer contributes each month, we need to calculate 70% of your monthly investment. The monthly investment is $200, so the employer's contribution each month would be 70% of $200, which is $140.

To calculate the amount you will have after 35 years, we can use the compound interest formula: A = P(1 + r/n)^(nt), where A is the amount, P is the principal (initial amount invested), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the principal is $200, the interest rate is 4.8%, the number of times interest is compounded per year is 12 (monthly), and the number of years is 35. Plugging these values into the formula, we get:

A = 200(1 + 0.048/12)^(12x35)

Simplifying this equation will give you the total amount you will have after 35 years.

To calculate how much money you have deposited into the account yourself, simply multiply your monthly investment ($200) by the number of months in 35 years (420 months).

To find out how much more money is in the account than what you have deposited, subtract the amount you have deposited from the total amount you will have after 35 years.

Answer 2

Amount per month contributed by employer $ = 200*0.70 = 140

Total amount employer contributes $ = 140*420 = 58800

Total amount employee contributes $ = 200*420 = 84000

Total amount after 35 years with interest calculated AT 4.8% (Employer + employee + interest) $ = 371024.67

Interest amount for 35 years accumulated $ = 228224.67

Amount deposited by employee $ = 84000

Excess amount in the account over the employee contribution

Including employer contribution $ = 287024.67

Excluding employer contribution $ = 228224.67

Step-by-step explanation:

LOOK AT THE PICTURE FOR STEPS