Financial Responsibility Answers

Tina contributes 9.5% of her monthly salary towards her 401(k) and her employer matches her contribution up to 5.4% of her annual salary. If the interest rate of her 401(k) is 8.1% compounded monthly and her monthly salary is $2,461, determine the amount in her account after 25 years. Round to the nearest cent. a. $339,804.33 b. $354,452.86 c. $344,941.24 d. $347,269.59 Please select the best answer from the choices provided

What is the biggest difference in who controls the 401(k) and IRA retirement plans? a. IRA is intended for a stable retirement income, while a 401(k) is reserved for emergencies or luxuries. b. 401(k) is a good last minute investment for retirement, while IRAs require years of investing. c. IRAs allow one to save a lot more money towards retirement than a 401(k). d. A 401(k) is controlled and monitored by an employer, and an IRA is controlled by the investing individual. Please select the best answer from the choices provided

Ron is 25 years old and is retiring at the age of 65. When he retires, he will need a monthly income of $4,123 for 20 years. If Ron contributes 10% of his monthly income to a 401(k) paying 5.5% compounded monthly, will he reach his goal for retirement given that his monthly income is 3,142.23? If he does not make his goal then state by what amount he will need to supplement his income. Round all answers to the nearest cent.a.Ron will meet his monthly goal of exactly $4,123 for retirement.b.Ron will meet his monthly goal of $4,123 for retirement with an excess of $125.34.c.Ron will not make his monthly goal of $4,123 and will need $359.74 to supplement his monthly income when he retires.d.Ron will not make his monthly goal of $4,123 and will need $450.61 to supplement his monthly income when he retires.

Ethan is planning for his retirement. He has narrowed it down to two investment options. The first is an IRA where monthly payments are made, in the amount of $416.66, for 30 years. The second is a Roth IRA where annual payments are made, in the amount of $5000, for 30 years. If both compound interest at a rate of 2.5%, determine which account will yield the largest future value for Ethan, and how much greater that value will be than that of the other account. Round your final answer to the nearest cent.a.IRA; $3,552.72b.Roth IRA; $3,552.72c.IRA; $1,470.39d.Roth IRA; $1,470.39

Marnie makes regular annual payments of $5,000 to her Individual Retirement Account (IRA). If the amount of interest she earns is 5.6% per year, determine the future value of the account after 35 years. Round to the nearest cent.a.$540,581.69b.$511,914.48c.$190,508.32d.$189,623.41

Andy would like to withdraw an annual salary of $45,000 from an account paying 3.1% compounded annually for 25 years once she retires. Given this information, determine the amount needed in her account in order for her to reach her goal. Round to the nearest cent.a.$9,386,168.48b.$14,516.13c.$798,954.46d.$774,931.58

Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana’s monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent.a.$2,024.02b.$1,887.42c.$461.70d.$325.10

Sarah is 27 years old and is retiring at the age of 65. When she retires, she estimates that she will need a semiannual income for 20 years. If Sarah contributes 9% of her semiannual income of $18,567.11 to a 401(k) paying 6.1% compounded semiannually, approximately what semiannual income will she be able to draw? (Hint: Find the future value of her investment prior to retirement and use that amount as her investment amount upon retirement) a. $21,050.02 b. $21,692.05 c. $20,407.99 d. $14,629.72 Please select the best answer from the choices provided

Which of the following retirement plans places a maximum amount that an individual can contribute to the fund in a given year at $5,000?a.401(k)b.Tax-Deferred Annuityc.Pensiond.IRA

Ron is 30 years old and is retiring at the age of 65. When he retires, he will need a monthly income of $1,270 for 10 years. If Ron contributes 5% of his monthly income to a 401(k) paying 2.75% compounded monthly, will he reach his goal for retirement given that his monthly income is $1,571.12? If he does not make his goal then state by what amount he will need to supplement his income. Round all answers to the nearest cent.a.Ron will meet his monthly goal of exactly $1,270 for retirement.b.Ron will meet his monthly goal of $1,270 for retirement with an excess of $7.42.c.Ron will not make his monthly goal of $1,270 and will need $74.16 to supplement his monthly income when he retires.d.Ron will not make his monthly goal of $1,270 and will need $741.68 to supplement his monthly income when he retires.