4. Changing the scenario, now let's assume that you want to have $1,400,000 in your retirement account at the end of 30 years. You have now decided to deposit funds at the end of every month for 30 years. The interest rate is still 3.60% per year. How much must you deposit each month to reach your goal in 30 years?
5. Assume you are 30 years old and earn $46,000 per year, never expect to receive a raise, and plan to retire at age 70. If you invest 7 percent of your monthly salary in a 401(k) plan returning 9 percent APR, and the company provides a $0.50 per $1.00 match on your contributions up to 3 percent of your salary. (Remember, show how you determined each of the inputs, and no interim rounding on return rate).
a) What is your personal monthly contribution? 1 pt
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b) What is the company's monthly contribution? 1 pt
c) What is the estimated future value of your 401(k) account after 40 years of monthly investments? 2pts Assume these are end of month deposits (regular annuity).