Questions: You can save $200 monthly to put into your retirement account and you have 35 years until you retire. Assume an 8% rate of return and a monthly compounding period.

a. How much money will you have in retirement?
b. What things could you change to increase the amount you will have in retirement?
c. Make just one change (amount, time, or interest rate) and write down how much money you will now have in retirement.

Step-by-step explanation:

Q1 .  

Money saved every month = $200  

Time period until you retire = 35 years

Rate of Interest = 8%

The money is compounded monthly.

a). Amount for retirement = Saving annuity

Saving or making  a series of payments at regular intervals is called annuity.

Annuity formula is :

P_{n} = d((1 + r/k)^{nk} - 1)/(r/k)

PN is the balance in the account after N years.

d is the regular deposit (the amount you deposit each month)

r is the annual interest rate in decimal form(R/100)

k is the number of compounding periods in one year

Here d= $200 , r = 0.08 , n = 35 years , k = 12 (compounded monthly)

P_{n} = 200((1 + 0.08/12)^{(35*12)} - 1)/(0.08/12)

= $ 458776.50

b). Looking at the formula used in above option we can -

Increase number of years to increase retirement amount

Increase the monthly amount deposited

Increasing rate of interest also increases the amount

Compounding Annually , half yearly or quaterly will decrease the amount

c). Let us change the amount from $200 to $300 . Then amount will be

P_{n} = d((1 + r/k)^{nk} - 1)/(r/k)

P_{n} = 300((1 + 0.08/12)^{(35*12)} - 1)/(0.08/12)

= $ 688164.75

A

hope this helps

Step-by-step explanation:

12 x 200 = 2,400

2,400 x 35 = 84,000

e

step-by-step explanation:

an equation by definition has to have two or more variables (x and 2 in this case)

its a trick question

step-by-step explanation:

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