FIN 419 Expect Success/uophelp.com FIN 419 Expect Success/uophelp.com | Page 14

Future Value. YOU are a new employee with the metro daily planet.
The planet offers three different retirement plans. Plans 1 starts the
first day of work and puts $1,100 away in your retirement acc at the
end of every year for 40 years. Plan 2 starts after 10 year and puts
away $2,100 every year for year. Plan 3 starts after 20 year and puts
away $4,100 every year for the last 20 year 0 employment. All tree
plans guarantee an annual growth rate of 11%.
a.
Which plan should you choose if you plan to work at the
Planet for 40 years ?
b. Which plan should you choose if you plan to work at the
Planet for only the next 30 years ?
c.
Which plan should you choose if you plan to work at the
Planet for only the next 20 years ?
d. Which plan should you choose if you plan to work at the
Planet for only the next 10 years ?
e.
What do the answers in parts (a) through (d) imply about
savings ?

P4-5
Future Value. YOU are a new employee with the metro daily planet.
The planet offers three different retirement plans. Plans 1 starts the
first day of work and puts $1,100 away in your retirement acc at the
end of every year for 40 years. Plan 2 starts after 10 year and puts
away $2,100 every year for year. Plan 3 starts after 20 year and puts
away $4,100 every year for the last 20 year 0 employment. All tree
plans guarantee an annual growth rate of 11%.
a.
Which plan should you choose if you plan to work at the
Planet for 40 years ?
b. Which plan should you choose if you plan to work at the
Planet for only the next 30 years ?
c.
Which plan should you choose if you plan to work at the
Planet for only the next 20 years ?
d. Which plan should you choose if you plan to work at the
Planet for only the next 10 years ?