Largest accumulation of money

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Reference no: EM131011063

You are one of the retirement counselors at the Valley View Bank. You have been asked to give a presentation to a class of high school seniors about the importance of saving for retirement. Your boss, the vice president of the trust division, has designed an example for you to use in your presentation. The students are shown five retirement scenarios and are asked to guess which yields the most money. Note annuities are ordinary. Although some people stop investing, the money remains in the account at 10% interest compounded annually.

A. Look at each scenario and make an educated guess as to which investor will have the Largest accumulation of money invested at 10% over the next 40 years. Then for your Presentation, calculate the final value for each scenario.

Venus invests $1,200 per year and stops after 15 years.
Kevin waits 15 years, invests $1,200 per year for 15 years, and stops.
Rafael waits 15 years, and then invests $1,200 per year for 25 years.
Magda waits 10 years, invests $1,500 per year for 15 years, and stops.
Heather waits 10 years, and then invests $1,500 per year for 30 years.

B. Based on the results, what message will this presentation convey to the students?

C. Recalculate each scenario as an annuity due.

D. How can the results be used in your presentation

Show all work.

Reference no: EM131011063

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