22 years old new hire (at t-0) is planning for retirement at age 65 (at t-43). The new employ lans to save $2,000 per year for the next 15 years (t-1 to t-15). The savings are estimated to ea % per year on average. At 65, the person wants to have a retirement income of $80,000 per ye for 20 years, with the first withdrawal occurring at t-43 right after last saving payment is deposite How much money must be saved each year from t-16 to t-43 to attain the desired retirement goa

22 years old new hire (at t-0) is planning for retirement at age 65 (at t-43). The new employ lans to save $2,000 per year for the next 15 years (t-1 to t-15). The savings are estimated to ea % per year on average. At 65, the person wants to have a retirement income of $80,000 per ye for 20 years, with the first withdrawal occurring at t-43 right after last saving payment is deposite How much money must be saved each year from t-16 to t-43 to attain the desired retirement goa

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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A 25-year-old engineer earning $65,000 per year wants to retire at age 55 with $2 million, and plans to invest in a fund made up of 60% stocks and 40% bonds. (a) How much money must be invested each year? (b) If the employer does a 100% match of retirement savings up to 3% of the employee’s salary, how much money must each invest annually?
An engineer changed jobs and is signing up for benefits. The company 401(k) includes a low cost treasury bond fund. The engineer will put 3% of her salary of $70,000 into the account, and her employer will match half this amount. Her salary is expected to increase 2.8% per year. (a) What is the value of the account after 10 years? (b) If she expects to work for 30 years, how much will be in the account?
In an effort to save money for early retirement, an environmental engineer plans to deposit $1200 per month starting one month from now, into a selfdirected investment account that pays 8% per year compounded semiannually. How much will be in the account at the end of 25 years?
A client, age 50, who is currently earning $100,000 per year, wishes to retire in 15 years with a fixed annual retirement income of $125,000. The client expects to live 25 years in retirement and is comfortable assuming a rate of return of 8% and inflation of 3%. What is the capital amount required at the onset of retirement to support the client’s retirement income? a) $1,441,095 b) $1,874,532 c) $2,336,367 d) $1,334,347
You begin working at age 25, and your employer deposits $310 each month into a retirement account that pays an APR of 6% compounded monthly. Make a table that shows the size of your nest egg in terms of the age at which you retire for the retirement ages of 60, 65 and 70. (Round your answers to the nearest cent.) Age Nest egg 60 $ 65 $ 70 $
Company has an plan to provide a pension plan for its one employee. They plan to start saving on 12/31/2020 and will save the same amount at the end of each year for 4 years ending at 12/31/2023. Once the money is accumulated on 12/31/2023. They will place in in an investment that will earn 9% annual interest. The company will pay $6,000 at the start of year year starting 1/1/2025 and continuing 4 more years to 1/1/2029 total of 5 payments. Instead of the amount of money sets aside from the savings annuity is $25,000 at 12/31/2023. So if the amount of money the company need to save every year is $5,887 starting 12/31/2020 then what interest does this savings account earn annually. I got 4% is that correct? thank you brenda
Continuing the scenario from question 3: Assume you have chosen to invest the $1,000monthly contributions at the end of each month. Once retired, you will adjust your investmentallocation to be more conservative and expect to average a 4% return on the account each year,compounded monthly. While retired, you plan to draw $5,000 from the account at the end ofeach month to go towards living expenses. You expect your lifespan in retirement to be 30years.A. How much money will you need to have at the beginning of retirement to fund the $5,000monthly withdrawals for 30 years?B. How many months could $5,000 be withdrawn before the account would be out of money?
To prepare for an early retirement, a self-employed businessman makes deposits of $6200 at the begin of each half-year for 6 years, starting on his 40 birthday. When he is 53, he wishes to make 30 equal day withdrawals. What is the size of each withdrawal if interest is 7.21% compounded daily?
How do I solve the following: An employee that has 35 years until retirement has a current salary of $30,000 per year. The employee's wages are expected to increase by 5% annually over the next 35 years. The employer has a defined benefit pension plan in which a worker’s annual pension benefit is equal to 2% of the employee's final year’s wage for each year of employment, multiplied by the number of years of employment. The employee's expected annual pension benefit is calculated as $115,836.32. The cmpany contributes to the pension plan each year for the next 35 years. Assume 10% actuarial rate of return, and 30 years of retirement life. At the employee's time of retirement, what does the accumulated amount in the employee's pension plan have to be in order to meet the employee's annual pension benefit each year in 30 years?
A retiree invests $8,000 in a savings plan that pays 6% per year. What will the account balance be at the end of the first year?
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first 10 years, she contributes $260 per month. She increases the contribution rate to $426.67 per month in years 11 through 20. This is followed by increases to $843.33 per month in years 21 through 30 and to $1,260 per month for the last 10 years. This money earns a 9 percent return. First compute the value of the retirement plan when she turns age 65. Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 6 percent.
Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you received your salary of $54,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 10 percent of your annual salary in an account that will earn 9.4 percent per year. Your salary will increase at 4 percent per year throughout your career. How much money will you have on the date of your retirement 45 years from today?

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