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Both John and Mary are aged 20 now. John plans to contribute $100 per month in...

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Finance

Both John and Mary are aged 20 now. John plans to contribute$100 per month in advance into his superannuation fund for 20 yearsand stop contributing thereafter. Mary plans to start contributiing$200 per month in advance into her superannuation fund at her 40thbirthday until she retires. They both plan to retire at age 60. Ifthe annual rate of return is 06.00%, what are the accumulatedvalues of their superannuation accounts at retirement?

Answer & Explanation Solved by verified expert
3.6 Ratings (662 Votes)
Lets calculate the deposits as two cash flow strings and then accumulated value by adding both Computation of Future value of Johns fund Formula for FV of ordinary annuity    See Answer
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Both John and Mary are aged 20 now. John plans to contribute$100 per month in advance into his superannuation fund for 20 yearsand stop contributing thereafter. Mary plans to start contributiing$200 per month in advance into her superannuation fund at her 40thbirthday until she retires. They both plan to retire at age 60. Ifthe annual rate of return is 06.00%, what are the accumulatedvalues of their superannuation accounts at retirement?

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