Starting at age 50 , a woman puts
At age 65 she has
(Simplify your answer. Type an integer or a decimal. Round intermediate steps to the nearest cent. Round the final answer to the nearest dollar if needed.)
Rounding to the nearest dollar, we get
Step 1 :First, we need to calculate the amount in the retirement account when the woman reaches age 60. She deposits $1400 at the end of each quarter for 10 years with an interest rate of 7% compounded quarterly.
Step 2 :We can use the formula for the future value of an ordinary annuity to calculate the amount in the account. The formula is:
Step 3 :Substituting the given values into the formula, we get
Step 4 :Next, we need to calculate the amount in the mutual fund account when the woman reaches age 65. She deposits the entire amount from the retirement account into the mutual fund account, and then deposits $500 at the end of each month for 5 years with an interest rate of 9% compounded monthly.
Step 5 :Again, we use the formula for the future value of an ordinary annuity. Substituting the given values into the formula, we get
Step 6 :Finally, we add the two amounts to get the total amount in the account when the woman reaches age 65. This gives us
Step 7 :Rounding to the nearest dollar, we get