For the first 10 years of her job, Jane used her annual bonuses of $2000 to travel, but beginning at age 31, and continuing for the next 34 years until she was 65, she put her bonuses in an IRA (Individual Retirement Account) at an interest rate of 8% compounded annually.
How much did Jane put into the account over the 34 years? How much total savings plus interest will Jane have in the account at retirement?
Unlike her twin sister, Joan put her bonuses in an IRA (Individual Retirement Account) at an interest rate of 8% compounded annually for the first 10 years of her job. After 10 years of savings she started spending her bonuses on vacations.
How much did Joan put into the account? How much total savings plus interest will Jane have in the account at retirement?
Instead of the correct answer for Joan, my answer in Excel was 7 cents more. Can you guess what I/Excel did incorrectly?
At a rate of 8% Joan earns more than Jane. At exactly what rate would they earn exactly the same amount? Do you see a way to find out?