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- Micah plans to deposit $2,500 into a retirement account this year. In future years, he plans to increase his deposit
amount by 4% each year. He also already has $16,902.11 in this account. Find his account’s future value in 30 years
under these assumptions, assuming his account earns (a) 6%, (b) 8%, (c) 10%, and (d) 12%.
D. Grab Bag- HuperMart Convenience Stores Corp. has $1,598,375 in an account set aside for longer term employee benefi t
commitments. The company is depositing $150,000 each year into this account. Assuming these deposits continue,
and that the account earns 7½%, how much will the company have in this account in 10 years? - Trevor has $296,101.43 in his 401(k). Assuming he keeps up deposits of $3,300 per year and his account continues to
earn 7.825%, how much will he have in his 401(k) when he retires in 20 years? - Suppose Kerry deposits $2,000 each year into an investment account every year. The only exception to this schedule is
that for her 10th payment she deposits $5,000 instead of her usual $2,000 deposit. If her account earns 6.98%, how
much will she have at the end of 30 years? - Mike deposited $2,500 into his individual retirement account (IRA) every year beginning at the end of 1982. He missed
his deposit in 1991 because he was temporarily laid off, but other than that he has kept his deposits up every year. If his
account earned 7.72%, what was his account value at the end of 2006? - Find the future value of an annuity of $4,000 per year for 28 years if the interest rate is (a) 6.5%, (b) 7.89%, and
(c) 11.76%. - Suppose that the Cauchy-Schwartz Corp. set aside $150,000 each quarter for 12 years into a special fund to cover
potential environmental cleanup costs. For the next 8 years, the company reduced its deposits to $80,000 per quarter.
Find the value of this account at the end of 20 years, assuming it earned a 5.3% interest rate for the entire period. - Kelly deposited $1,620 per month into her retirement account for 20 years. For the next 12 years she increased her
deposits to $2100 per month. Assuming she earned 8.13%, fi nd her account’s future value. Find the total interest
earned on this account. - Find the future value in 22 years for an investment account if deposits are made annually, the fi rst annual deposit is
$750, and deposits increase by $75 per year in each subsequent year. The interest rate is 8%. - Zaxarinax Corp. has $475,901 in an account set aside for future fi nancial goals. The company plans to deposit
$125,000 in the account this year, and then each year after that increase its deposits by 3.75%. The company expects
that this account will earn 8.19%. Under these assumptions, project the value of this account in 10 years. - Leslie deposits $400 each month for 10 years into an investment account. She then increases her deposits to $500 per
month. If her account earns 8.4%, how much will she have at the end of 16 years?
Exercises 5.2 227