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Sarah is 27 years old and is retiring at the age of 65. when she retires, she estimates that she will need a semiannual income for 20 years. if sarah contributes 9% of her semiannual income of $18,567.11 to a 401(k) paying 6.1% compounded semiannually, approximately what semiannual income will she be able to draw? (hint: find the future value of her investment prior to retirement and use that amount as her investment amount upon retirement) a. $21,050.02 b. $21,692.05 c. $20,407.99 d. $14,629.72 please select the best answer from the choices provided a b c d

Sagot :

You must first determine what the question is asking in order to be able to solve it. In this instance, it wants to know a rough estimate of Sarah's expected semiannual income. To solve this, all you need to do is calculate her investment's future value before retirement and apply that value as her retirement investment amount. The approximate semiannual income she will be able to draw is $21,050.02.

What is Future Value?

The value of a current asset at some point in the future based on an estimated rate of growth is known as future value (FV). For investors and financial planners, the future value is essential because they use it to predict how much an investment made today will be worth in the future.

Investors can make wise investment choices based on their anticipated needs by knowing the future value. However, external economic forces that depreciate an asset's value, such inflation, might have a negative impact on the asset's future worth. The FV of an asset can be determined in one of two ways: either using simple interest or using compound interest.

To know more about future value refer:

https://brainly.com/question/19261146

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