**Unformatted text preview: **ividual retirement arrangement (IRA). The IRA will be invested to earn an
annual return of 10%, which is assumed to be attainable over the next
40 years.
a. If Hal makes annual end-of-year $2,000 deposits into the IRA, how much
will he have accumulated by the end of his 65th year?
b. If Hal decides to wait until age 35 to begin making annual end-of-year
$2,000 deposits into the IRA, how much will he have accumulated by the end
of his 65th year?
c. Using your findings in parts a and b, discuss the impact of delaying making
deposits into the IRA for 10 years (age 25 to age 35) on the amount accumulated by the end of Hal’s 65th year. LG3 LG2 4–19 4–20 Present value of a retirement annuity An insurance agent is trying to sell you
an immediate-retirement annuity, which for a single amount paid today will provide you with $12,000 at the end of each year for the next 25 years. You currently earn 9% on low-risk investments comparable to the retirement annuity.
Ignoring taxes, what is the most you would pay for this annuity? LG...

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