a) The amount of money invested each year.Given: Annual incone is $65000.Number of year is 30.Future Value is $2000000.b) The amount of money each should invest annualy.Saving is 3\%.

coexpennan

coexpennan

Answered question

2021-08-18

a) The amount of money invested each year.
Given: Annual incone is $65000.
Number of year is 30.
Future Value is $2000000.
b) The amount of money each should invest annualy.
Saving is 3%.

Answer & Explanation

Sadie Eaton

Sadie Eaton

Skilled2021-08-19Added 104 answers

Calculation:
Write the expression for future value.
F=A((1+i)n1)i .......(I)
Here, the future value is F, the annual investment is A, the interest rate is i and the number of period is n.
The interest rate for stock fund is 7.3%.
Substitute $2000000 for F and 0.073 for i and 30 for n in Equation (I).
$2000000=A((1+0.073)301)0.073
A=$200000099.72
A=$20056
Conclusion:
Thus, the amount of money invested each year is $20056.
Calculation:
Calculate the amount contributed each year by the employer.
AE=$65000×3%
=$65000×0.03
=$1950
Calculate the amount invested by the employer.
A=AAE .......(II)
Here, the annual amount to be invested is A, the annual amount invested by the employer is AE and the annual amount invested by the employee is A.
Substitute $20056 for A, $1950 for AE in Equation (II).
A=$20056$1950
=$18106
Conclusion:
Thus, the amount invested by the employer annually is $1950.
The amount invested by the employee annually is $18106.

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