When you take your first job, you decide to start saving right away for your retirement....

 

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When you take your first job, you decide to start saving right away for your retirement. You put $5.000 per year into the company's 401(k) plan, which averages 8% interest per year. Five years later, you move to another job and start a new 401(k) plan. You never get around to merging the funds in the two plans. If the first plan continued to earn interest at the rate of 8% per year for 35 years after you stopped making contributions. how much is the account worth? (a) Draw a cash-flow diagram for this situation. (b) Can you buy a house that worths $400,000 with this account? When you take your first job, you decide to start saving right away for your retirement. You put $5.000 per year into the company's 401(k) plan, which averages 8% interest per year. Five years later, you move to another job and start a new 401(k) plan. You never get around to merging the funds in the two plans. If the first plan continued to earn interest at the rate of 8% per year for 35 years after you stopped making contributions. how much is the account worth? (a) Draw a cash-flow diagram for this situation. (b) Can you buy a house that worths $400,000 with this account?