Samone will have worked for Roseberry Industries for 10 years at the end of this

Question

Samone will have worked for Roseberry Industries for 10 years at the end of this year. She plans to retire at the time to pursue her Ph.D in finance at Catatonic State. Samone could have worked for Roseberry Industries another 15 years, at which time he pension, at retirement would have been $25,000 per year, payable for 20 years. Roseberry Industries began making payments inmto Samones retiremenyt plan, which earns10% at the end of her first year of employment. Under Roseberrys policies, Samone may transfer her pension account balance to some other account provided the balance is $425,000 or less. Will Samone be able to transfer her account balance?

Explanation / Answer

Assuming she receives payments at the beginning of year 25, and thereafter for another 19 years... Value at t=25 = 25,000 + (25,000[((1 - (1/1.10^19))/0.10) = 25,000 + (25,000(8.364920)) =25,000 + 209123 =$234,123 since she's only worked 10 years not 25, then it would be even less than that, so she can transfer

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