1. Marcus would like to save up $3 million for his retirement. He has chosen a stock index fund that has an average APR of 7.2%. He plans to draw on the funds at 70 years old which gives him 40 years to save. (a) How much should Marcus save monthly to meet his retirement goal? (b) How much of the future value of $3 million is interest? Give the answer both in dollars and as a percentage of the total funds. 2. Simone bought her house for $150,000 in 2000 and sold it for $725,000 in 2020. What are the total and annual returns on this investment?

1. Marcus would like to save up $3 million for his retirement. He has chosen a stock index fund that has an average APR of 7.2%. He plans to draw on the funds at 70 years old which gives him 40 years to save. (a) How much should Marcus save monthly to meet his retirement goal? (b) How much of the future value of $3 million is interest? Give the answer both in dollars and as a percentage of the total funds. 2. Simone bought her house for $150,000 in 2000 and sold it for $725,000 in 2020. What are the total and annual returns on this investment?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Willie would like to have $500,000 set aside at retirement. He would like to make annual deposits into his retirement fund, and expects to retire in 30 years. In order to meet his goal, how much must he deposit each year if he can earn a 6% return? N =_____ I/YR =_____ PV =________ PMT =_________ FV = ____________
I decide I want to retire in 20 years, and plan to invest $6,000 a year. Assuming a 12% interest rate, to solve for how much I will have in my fund to retire with, I need to solve for: $6,000 (PV ann n = 20, 1 = 12%) A B True False
Sarah Wiggum would like to make a single investment and have $1.2 million at the time of her retirement in 30 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? If Sarah invests that amount and could earn a 14 percent annual return, how soon could she retire, assuming she is still going to retire when she has $1.2 million? Click on the table icon to view the PVIF table To have $1.2 million at retirement, the amount Sarah must invest today is $ (Round to the nearest cent.)
Please help with a and b
Paul Finley wishes to become a millionaire. His money market fund has a balance of $239,392 and has a guaranteed interest rate of 10%. How many years must Paul leave that balance in the fund in order to get his desired $1,000,000? Round answer to 0 decimal places, e.g. 45.)
Use Excel to solve the following problem. Assume that you are 39 years old planning for your future retirement at age 65. You think that you will be comfortable living on the proceeds from a $1,000,000 401K Retirement Account.a. If your investments grow at an average rate of 6% annually how much must you invest monthly to achieve your projected retirement fund total by the time you retire in 26 years?b. Assuming that when you do retire, you will re-direct your $1,000,000 investment portfolio into less volatile and more secure mutual funds. You expect that, invested in these sources, your portfolio will securely earn 4.5% annually. Based on your assumptions and the normal life expectancy of an American male or female (I determined this to be 81 years old), without consuming any of your principal, how much money will you have on a monthly basis to support your life?(I have worked this problem out on my own, I just want to be sure I applied the formulas and concepts correctly.)
Sarah Wiggum would like to make a single investment and have $2.0 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 14 percent, how soon could she then retire? If Sarah can earn an annual return of 14 percent, the number of years until she could retire is________years. (Round to one decimal place.)
An individual has determined utilizing the annuity method of capital needs analysis that he needs $1,045,656 at the beginning of his retirement to meet his retirement life expectancy goals. If this individual would like to be more conservative in his retirement planning forecast and maintain this capital balance throughout his retirement life expectancy of 32 years, given an expected earnings rate of 6%, and an inflation rate of 3% during the period, how much more would he need to have at the beginning of his retirement?
(Future value) Sarah Wiggum would like to make a single lump-sum investment and have $1.7 million at the time of her retirement in 28 years. She has found a mutual fund that expects to earn 77 percent annually. How much must Sarah invest today? If Sarah earned an annual return of 14 percent, how much must she invest today?
3. You are saving for retirement. To live comfortably, you decide that you will need $2.5 million by the time you are 65. If you assume you are able to do that, and will live 20 more years (until age 85), the amount you can withdraw at the end of each of those years at an interest rate of 5% before your retirement fund is empty is closest to: A) $72,987. B) $75,606. C) $197,987. D) $200,606.
2. Marjorie Yan recently retired from work and wants to use a portion of her retirement money for investment. She has two investment options, namely (1) a bond fund, and (2) a stock fund. Each investment would be for one year and will give a return to of 6% for the bond fund and 10% for stock fund. Whatever portion of her retirement money she commits for investment, she wants to invest at least 25% of that amount in the bond fund. Moreover, she wants to select a mix that will give her a total return of at least 7.5%. Marjorie wants to determine the percentage that should be allocated to each possible investment alternative to maximize * returns. 1 Add File
suppose you decide to invest 5,000 to support your retirement plans, in 30 year time. A private fund promises to pay 6% p.a. until your retirement. How much will be in the account 30 years from now?

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