5.09 Module Exam + 6.02 Jill starts to save at age 25 for a vacation home that...
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5.09 Module Exam + 6.02
- Jill starts to save at age 25 for a vacation home that she wants to buy for her 50th birthday. She will contribute $2500 each year to an account, which earns 1.3% annual interest, compounded quarterly. What is the future value of this investment, rounded to the nearest dollar, when Jill is ready to purchase the vacation home
$73,712
$73,951
$295,806
- Eliza is a 60-year old woman who has been in the workforce for many years. She has made many investments over time as part of her retirement planning. But until now, she has no IRA. Eliza would like to add an IRA to her retirement portfolio. She can make contributions during her remaining 8 working years, but would like to maintain low-risk investments. At this stage of her career, Eliza is in a relatively high tax bracket, but she expects to drop to a lower tax bracket when she retires. At this point, which type of IRA would be best for Eliza, a Traditional or Roth IRA?
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