1) Shaylea, age 22, just started working full-time and plans to deposit $4,000 annually into an IRA earning 9 percent interest compounded annually. Deposits will be made at the end of each year. How much would she have in 20 years, 30 years, and 40 years? If she changed her investment period and instead invested $333.33 monthly and the investment also changed to monthly compounding, how much would she have after the same three time periods? Comment on the differences over time.
With annual investments and? compounding, after 20 ?years, Shaylea would have ?$________?
With annual investments and compounding, after 30 years, Shaylea would have $_________?
With annual investments and compounding, after 40 years, Shaylea would have $________?
With montly investments and monthly compounding interest, after 20 years, Shaylea would have $_______?
With montly investments and monthly compounding interest, after 30 years, Shaylea would have $_______?
With montly investments and monthly compounding interest, after 40 years, Shaylea would have $_______?
2) You've just bought a new flat screen TV for $4,000 and the store you bought it from offers to let you finance the entire purchase at an annual rate of 14% compounded monthly. If you take the financing and make monthly payments of $108, how long will it take to pay the loan? off? How much did you pay in interest over the life of the loan (that is, the difference between the total of all your payments and the amount of your payments that went toward your principal of $4,000)?
To pay off the loan, it will take approximately _______ months?
Over the life of the loan you paid $_______ in interest?