# HW1 - BUS 241 Spring 2009 Homework #1 Turn in your answers...

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BUS 241 Spring 2009 Homework #1 Turn in your answers on paper. Include your calculations (a printout from Excel would be fine). 1. Compare the following two individuals: Tim started saving for retirement at age 20. He saved \$1000 per month (at the end of the month). Sally delayed saving until she was 40. She saved \$2000 at the end of each month. If each person earns 7% compounded monthly, what are the balances in each person’s account at age 60 (at the end of the year)? What happens if inflation is 3% per year? What are the balances in real dollars? 2. Compare the following two individuals: Jill started saving for retirement beginning at age 20. She saved \$15,000 per year (at the end of the year). When she turned 40 she stopped contributing. Joe delayed saving until he was age 40. He then began saving \$15,000 per year (also at the end of the year) and continued this until he retired. If each earned 7% per year (compounded annually), what would be the balance in each account at age 60 (at the end of the year)? 3.
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## This note was uploaded on 04/04/2012 for the course BUSINESS 105 taught by Professor Luann during the Spring '08 term at uot.

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