document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1042379>Question 1042379</A>: <I><SPAN STYLE=\"word-break: break-all;\"> This exercise illustrates just how fast exponential functions grow in the long term. Suppose you start work for a company at age 25. You are offered two rather unlikely retirement options.<BR>\n" );
document.write( "Retirement option 1: When you retire, you will receive $15,000 for each year of service.<BR>\n" );
document.write( "Retirement option 2: When you start work, the company deposits $2500 into a savings account that pays a monthly rate of 1.3%. When you retire, the account will be closed and the balance given to you.<BR>\n" );
document.write( "How much will you have under the second plan at age 55? (Round your answer to the nearest cent.) <BR>\n" );
document.write( "$  600,000<BR>\n" );
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document.write( "Incorrect: Your answer is incorrect.<BR>\n" );
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document.write( "How much will you have under the second plan at age 65? (Round your answer to the nearest cent.) <BR>\n" );
document.write( "$  600,000<BR>\n" );
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document.write( "Incorrect: Your answer is incorrect.\r<BR>\n" );
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document.write( "I was wrong on both. Can someone show me how to solve these with the correct answers.<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #657348 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=657348\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> This exercise illustrates just how fast exponential functions grow in the long term. Suppose you start work for a company at age 25. You are offered two rather unlikely retirement options.<BR>\n" );
document.write( "Retirement option 1: When you retire, you will receive $15,000 for each year of service.<BR>\n" );
document.write( "Retirement option 2: When you start work, the company deposits $2500 into a savings account that pays a monthly rate of 1.3%. When you retire, the account will be closed and the balance given to you.<BR>\n" );
document.write( "How much will you have under the second plan at age 55? (Round your answer to the nearest cent.) <BR>\n" );
document.write( "-------<BR>\n" );
document.write( "30 years = 20*12 = 240 months<BR>\n" );
document.write( "2500*(1.013)^240 = 2500*22.196 = $55489.00<BR>\n" );
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document.write( "How much will you have under the second plan at age 65? (Round your answer to the nearest cent.) <BR>\n" );
document.write( "40 years = 40*12 = 480 months<BR>\n" );
document.write( "2500*(1.013)^480 = 2500*492.64 = $1,231,611.63\r<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
document.write( "--------------- </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );