Question: Future Value Calculations should be derived using at least 4 decimal points. Kathy is planning for her retirement in 30 years. Kathy sets up a

Future Value

Calculations should be derived using at least 4 decimal points.

Kathy is planning for her retirement in 30 years.

  1. Kathy sets up a plan in which $400 is take from her pay check each month. What is the value of this annuity at the end of 30 years if it offers 8% annual interest rate compounded monthly?
  2. After thinking it through, Kathy thinks she will need $200,000 at the start of her retirement. What are her monthly payments that will result in $200,000 at the end of 30 years for an annuity that pays an annual interest rate of 5% compounded monthly?

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