Problem 4 and 5-2 Future Value Consider that you are 35 years old and have just

Question

Problem 4 and 5-2 Future Value Consider that you are 35 years old and have just changed to a new job. You have $143,000 in th retirement plan from your former employer. You can roll that money into the retirement plan of the ne 0 each year into your new employer's plan. If the rolled-over money and the new contributions both earn an 6 percent return, how much should you xpect to have when you retire in 30 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value References eBook & Resources Worksheet Problem 4 and 5-2 Future Value Check my work

Explanation / Answer

Future value here is the sum of future value of annuity 6300 plus future value of existing balance 143000

A Future value of annuity due P*[(1+r)^n -1]/r Periodic payment P 6500 Rate per period r 6% Number of periods n 30 Future value of annuity = 6500*[(1+0.06)^30-1]/0.06 =                   513,878.21 B Future value of 143000 = 143000 *(1+0.06)^30 821,319.24 C=A+B Total future value = 1,335,197.45

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