Gayle just turned 20 and receives a gift of $40,000 from her grandparents. Gayle plans...
50.1K
Verified Solution
Link Copied!
Question
Finance
Gayle just turned 20 and receives a gift of $40,000 from her grandparents. Gayle plans ahead and would like to retire on her 55th birthday. Gayle would like to have $2 million saved by her retirement date, in order to support her lifestyle throughout her retirement years. Gayle opens an investment account and deposits the $40,000 gift into it. Gayle's investment 8 account earns an annual effective rate of 7%. a) (5 marks) How much will Gayle's $40,000 gift be worth by the time she turns 55? How much b) (10 marks) Gayle realizes that she will have to make additional contributions into her short of her $2 million goal will she be on that date? investment account in order to reach her retirement goal. She plans to make a deposit into the account each birthday starting today (her 20th birthday). She will make her last deposit on her 50h birthday. After her 50th birthday, she intends to stop making deposits and let all the funds in the investment account grow with interest until they reach $2 million when she turns 55. How much will Gayle have to deposit each year in order to achieve her goal
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
