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Math Help - Compound interest..

  1. #1
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    Compound interest..

    Ramone wants to start saving for retirement on his 23rd birthday for when he is 65. because he is just starting his work career he can only contribute $100 a month, his work place offers three retirement plans he can invest in. the first provides 5% interest compunded monthly. the second is 7.5% compounded monthly. The third provides 11% compounded monthly.

    Ramone just found out that his wife is pregnant and figures that he wont be able to start contributing until the child starts school (six years from now) because he will have many expenses and day care. ramone expects that by the time he will have recieved enough raises to contribute $200 a month.

    And then the following questions..

    1) calculate 3 scenarios at age 23 if he deposited $ c100 a month.
    2) calculations if ramone begins saving six years later with $200 a month.
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  2. #2
    Senior Member
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    Berkeley, Illinois
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    Quote Originally Posted by Verde13 View Post
    Ramone wants to start saving for retirement on his 23rd birthday for when he is 65. because he is just starting his work career he can only contribute $100 a month, his work place offers three retirement plans he can invest in. the first provides 5% interest compunded monthly. the second is 7.5% compounded monthly. The third provides 11% compounded monthly.

    Ramone just found out that his wife is pregnant and figures that he wont be able to start contributing until the child starts school (six years from now) because he will have many expenses and day care. ramone expects that by the time he will have recieved enough raises to contribute $200 a month.

    And then the following questions..

    1) calculate 3 scenarios at age 23 if he deposited $ c100 a month.
    2) calculations if ramone begins saving six years later with $200 a month.
    For question 2, you did not specify an interest rate. For both question 1 and question 2, enter your interest rate per period and go here:

    Annuity Immediate Accumulated Value

    That will show you the math behind your payment plans.
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