Score: 0.67 of 1 pt 4 of 4 (4 complete) HW Score: 66.67%, 2.67 of 4 pts %) Bus E

Question

Score: 0.67 of 1 pt 4 of 4 (4 complete) HW Score: 66.67%, 2.67 of 4 pts %) Bus Econ R. 1.39 Question Help * Sally makes deposits into a retirement account every year from the age of 30 until she retires at age 65 a) If Sally deposits $1150 per year and the account earns interest at a rate of 9% per year, compounded annually, how much does she have in the account when she retires? b) How much of that total amount is from Sally's deposits? How much is interest? a) Sally will have s in the account when she retires. Round to the nearest cent as needed.)

Explanation / Answer

Solution:

Look up the section on "compound interest."

There, the amount of an annuity for 35 years at 9% is listed as $90.32 per $1.00 of payment.

Thus, the total would be $1,150 * 90.32 or 103,868

b) her deposits total 35 * 1,500, or 40,250.

The interest, of course, is the rest of the total.

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