Latest IIT-JEE Aptitude Question SOLUTION: A client is celebrating his 50th b-day and wants to start saving for his anticipated retirement at age 65. he wants to be able to withdraw $20,000 from his saving account on his 66

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(#M40026377) IIT-JEE question Keep an EYE

A client is celebrating his 50th b-day and wants to start saving for his anticipated retirement at age 65. he wants to be able to withdraw $20,000 from his saving account on his 66th b-day and each year for 19 more years after that.

After extensive research, the client determines that he can invest his money in an account that offers 5% interest per year with quarterly compounding. he wants to make equal annual payments on each b-day into the account - the first payment on his 51st b-day and his last on his 65th b-day.

In addition, the clients employer will contribute $2000 to the account each year (beginning on the clients 51st b-day) as part of the companies profit-sharing plan (a total of 15 contributions.)

The amount the client must deposit personally into the account each year on his b-day to enable him to make the desired wds at the retirement is closest to:

A. 9375

B. 9459

C. 11400

Asked In IIT-JEE Garima (10 years ago)

Solved chaitanya Read Solution (2)

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chaitanya  (10 years ago)

First, we need to know how much he needs in his account on his 65th birthday.

Annual effective rate = (1.0125)^4 – 1 = 5.0945%
Future Value = 0
n = 20
Payment = 20,000
Solve for Present Value = 247,259
Now,
calculate the required (total) payment:
n = 15
interest rate = 5.0945%
Present Value = 0
Future Value = 247,259
Solve for Payment = $11,377
Client’s contribution = $11,377 – $2,000 = $9,377.

Answer: A) 9375.

i think so it is nearer

correct me if any...........

Is this solution Helpfull? Yes (9) | No (4)  

chaitanya  (10 years ago)

tagtical question

answer is(A)9375

Is this solution Helpfull? Yes (5) | No (3)  

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