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Today is July 1, 2024. Four ago, when you started ywr fintjob after graduating from Ohio State in 2020'yo' began saving a portion of your salary in your company's401k savings plan. Your salary Is $65,000 annually, of which you decide to put 12% In the savings plan atthe end of each year. (inreaRy, aportion is saved from each paycheck, but we will use annual deposit for simplicity. Assume the savings plan earns 8% Interest anually. 5) Your company provides matching contributions to the savings plan on the first 6%ef compensation that you contribute to the sawp-an. comple-Yyou contribute 2% of your solry, your company wil' motch that onddeposit onomount equal to 2% ofyour solny,too. Atotal of 4% of your salaryisdeposited into the savings plan. Another exom plelfyou cortrbute 30% of your solory, your componywill only matchthefirst 6% contributed ond deposit aromount to 6%ofyour soary. Atotal of 36% of your salary is deposited into the savings plon a)What is the amount of each deposit "A-(Ayour contribution+your employers) on July 11n 2021, 2022, 2023, and 2024(today)? bl What is the total amount of money that is in your savings plan account today? c) Calculate the total amount of cash, excluding interest, that was actually taken out of your paycheck over the course ol 4 years Consider the following three scenarios in parts d, e, and 10 independently of eachother d) Scenarlo 1: For some reason, you stop contrlbuting to your company's savings plan after the 4 deposits above, so the curent ambunt in your savings plan (part b) earns Interest without any addlitional contributions. What amount would be in your savings account in 2030 (6 years from today) ) Scenario 2: Let's say, you and your company contribute the same amount (part a) every year for the next 6 years until July 1, 2030 (10 deposits total). Now, how much would be In your savings account in 20307 0 Scenario 3: Alternatively, your co worker decides not to centribute to the 401k savings plan when starting in 2020. However, they start saving today Uualy 1, 2024) and make deposits every year un uly 1, 2030). How much would be in their savings plan account in 2030? (cash flow diagram below g Scenario 4: Last scenario, your friend does not have a company matching plan. They decide not to contribute to a 401k savings plan at al, They instead keep 10% of their salary (assume it l, the se ne in their bank account which earns 1% annualy. Today, they move their money to a mutual fund which earnt the overage return for us divenned stock pertfolioi sume sand make future deposits (2025 to 2030) to this fund. How much do they have saved in 2030? (cash flow diagram below Sa) sb) Sc) 56) Se) sn) Sgl y is July 1, 2024. Four years ago, when you started your first job after graduating from Ohio State in 2020, you began saving a portion of your salary In your company's 401k savings plan. Your ryls S65 000 annually, of which you decide to put 12% in the savings plan at the end of each year, inreality, aporti nissaved from each paycheck but we wil se analdepots fo si pen ume the savings plan earns 8% interest annually. r company provides matching contributions to the savings plan on the first 6% of compensation that you contribute to the savings plan. or example if you contribute 2% 0 your salary, your company was match that and deposit an amount equal to 2% o your salary, too. A total of 4% of your salary is deposited into the savings plan. nother example i you contribute 30% o your salary, your company will only match the irst 6% contributed ond deposit an amount equal to 6% of your so ory. A total of 36% of vour salaris deposited into the savinas plan. What is the amount of each deposit "A" (Aa your contribution your employer's) on July 1 in 2021, 2022, 2023, and 2024 (today)? What is the total amount of money that is in your savings plan account today? alculate the total amount of cash, excluding interest, that was actually taken out of your paycheck over the course of 4 years. sider the following three scenarios (in parts d, e, and () independently of eachother: cenarlo 1: fer some reason, you stop centributing to your compay's savings plan after the 4 deposits above, go the current amount in your saving plan (part b) earns Interest without any itional contributions. What amount would be in your savings account in 2030 (6 years from today]? cenario 2: Let's say, you and your company contribute the same amount (part a) every year for the next 6 years until July 1, 2030 (10 deposits total). Now, how much would be in your savings ount in 20307 cenario 3 Alternatively, your co-worker decides not to contribute to the 401k savings plan when starting in 2020. Ho ever, they start saving today July 1, 2024 and make deposits every year u ly 1, 2030). How much would be in their savings plan account in 2030? (cash flow diagram below) Scenario 4: Last scenarie, your friend does not have a company matching plan. They decide not to contribute to a 401k savings plan at all. They instead keep 10% of their salary (assume it is the me in their bank account which earns 1% annually. Today, they move their money into a mutual fund which earns the average return for us diversi ed stock portfolios a sum . 9 5% and make ure deposits (2025 to 2030) to this fund. How much do they have saved in 2030? (cash flow diagram below)

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