Question

Betty decides to set aside $200/month. If her monthly 401(k) savings are earning 5.4% APR compounded monthly, what will the balance be in her account after 40 years? 10. Over the 40-year period, how much total money did Betty deposit into the 401(k)? 11. Over the 40-year period, how much less money did she receive in her paychecks?

Answer 1

(9) $339076.60 (10) $72000 (11) $220800

Note: Kindly find an attached copy of the complete question given below. i solved for 9,10,11 only.

Explanation:

Solution

Given that:

Betty set aside $200/month

With a 401 (k) savings

t = 40 years

APR = 5.4%

Now we find the balance in her account after 40 years.

Now,

A = PMT [(1 +r/n)^nt -1]/(r/n)

A = 200 [ (1 + 0.054/12)^(12)(40) - 1]/(0.054/12)

A= $339076.60

(10) Recall that:

t = 40 years

Per month deposit = $150 dollar

The total deposit becomes

t = 40 * 12 = 480 Month

Total deposit = 480 * 150

=$72000

(11) Now we find the less money she received in her paychecks

Thus

Without monthly saving paycheck is =$2300

Now,

For 40 years becomes = $2300 * 40 * 12

=$1,104000

So,

20% of tax deducted = 20/100 * $1,104000

=$220800

Therefore the less amount received in 40 years is $220800

Note:( My research for the complete question was from quiz let, chegg)