Question 1127349: Mitch and Bill are both age 75. When Mitch was 22 years old, he began depositing $1300 per year into a savings account. He made deposits for the first 10 years, at which point he was forced to stop making deposits. However, he left his money in the account, where it continued to earn interest for the next 43 years. Bill didn't start saving until he was 46 years old, but for the next 29 years he made annual deposits of $1300. Assume that both accounts earned an average annual return of 5% (compounded once a year). Complete parts (a) through (d) below.
a. How much money does Mitch have in his account at age 75?
At age 75, Mitch has $
nothing in his account.
(Round to the nearest cent as needed.)
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! Mitch P=1300((1.05)^10-1)/.05=$16,351.26
for the next 43 years, 16351.26(1.05)^43=$133,257.33
Bill P=1300((1.05)^29-1)/.05=$81,019.53
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