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What is the current value of your settlement

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Question - You win a judgment in an auto accident case for $90,000. You immediately receive $25,000 but must pay your lawyer's fee of $15,000. In addition, you will receive $2,000 a year for 20 years for a total of $40,000, after which the balance owed ($25,000) will be paid. If the interest rate is 6 percent, what is the current value of your settlement?

You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does the same starting at age 40 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 65? Who has the larger amount at age 65?

Reference no: EM133068796

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