Stephanie is going to contribute $250 on the first of each month, starting today, to her retirement account. Her employer will provide a 50 percent match. In other words, her employer will add $125 to the amount Stephanie saves. If both Stephanie and her employer continue to do this and she can earn a monthly interest rate of .5 percent, how much will she have in her retirement account 25 years from now?

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DeniceSandidge DeniceSandidge · Answer 1 · 2019-10-07T10:37:16+02:00

Answer:

she have in her retirement account 25 years from now is $261172.09

Step-by-step explanation:

given data

contribute principal P = $250

employer = 50 %

employer add = $125

interest rate = 0.5 % = 0.005

time = 25 year = 300 months

to find out

how much will she have in her retirement account 25 years from now

solution

here monthly payment = 250 + 125 = $375

we will apply here amount formula that is

amount = P × [tex]\frac{(1+rate)^{time} - 1 }{rate}[/tex] × ( 1 + rate )

put here value

amount = 375 × [tex]\frac{(1+0.005)^{300} - 1 }{0.005}[/tex] × ( 1 + 0.005 )

amount = 261172.09

so she have in her retirement account 25 years from now is $261172.09