Please use future value annuity table to make calculations.

Shaylea, age 22, just started working full-time and plans to deposit

$4,000

annually into an IRA earning

With annual investments and compounding, after

20

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 2

With annual investments and compounding, after

30

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 3

With annual investments and compounding, after

40

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 4

With monthly investments and monthly compounding interest, after

20

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 5

With monthly investments and monthly compounding interest, after

30

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 6

With monthly investments and monthly compounding interest, after

40

years, Shaylea would have

$enter your response here.

(Round to the nearest cent.)

Part 7

The differences are:(Select the best choice below.)

A.

the longer the money is invested, the less you will have in the future because the interest rate does not change with the cost of living.

B.

the longer the money is invested, the more you will have in the future. The more compounding periods you have in a given time, the more money you will have in the future.

C.

the longer the money is invested the more you will have in the future. The more compounding periods you have, the less money you will have in the future because the interest rate is lower.

D.

the longer the money is invested, the more you will have in the future. The number of compounding periods does not have any effect on the investment.

6

percent interest compounded annually. How much would she have in

20

years,

30

years, and

40

years? If she changed her investment period and instead invested

$333.33

monthly, and the investment also changed to monthly compounding, how much would she have after the same three time periods? Comment on the differences over time.