Consider that you are 35 years old and have just changed to a new job. You have

Question

Consider that you are 35 years old and have just changed to a new job. You have $72,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $2,800 each year into your new employer’s plan.

If the rolled-over money and the new contributions both earn a 7 percent return, how much should you expect to have when you retire in 30 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Future value $________

Explanation / Answer

The compund sum of $ 1 at the end of 30 years compounded annually at 7% is 7.612

The compound value of an annuity of $ 1 for 30 years at 7% is 95.459

Therefore, I should expect to have 72,000 x 7.612 + 2,800 x 95.459 =548,064 + 267,285.20 = $ 815,349.20 ANS

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