Economics3. Sarah wants to have $2,000,000 in net worth when he retires. To achieve this goal, she plans toinvest $1,000 each year (starting one year from now) into an account of time that earns 10%interest rate compouris how many years?a. 31.94 (32 yb. 55.64 (56 ye25.56 (26 years)d. 20.36 (20 years)ually. The amount of time Sarah can retire as a multimillionaireC.

in this we have to find future value of ANNUITY to get future value.

3. Sarah wants to have $2,000,000 in net worth when he retires. To achieve this goal, she p invest $1,000 each year (starting one year from now) into an account of time that earr interest rate compour is how many years? a. 31.94 (32 y b. 55.64 (56 ye ually. The amount of time Sarah can retire as a multimilli

3. Sarah wants to have $2,000,000 in net worth when he retires. To achieve this goal, she p invest $1,000 each year (starting one year from now) into an account of time that earr interest rate compour is how many years? a. 31.94 (32 y b. 55.64 (56 ye ually. The amount of time Sarah can retire as a multimilli

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 couple will retire in 40 years; they plan to spend about $33,000 a year in retirement, which should last about 20 years. They believe that they can earn 8% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. How would the answer to part (a) change if the couple also realize that in 15 years they will need to spend $63,000 on their child’s college education?
Monica has decided that she wants to build enough retirement wealth, if invested at 10 percent per year, to provide her with $4,000 c monthly income for 20 years. To date, she has saved nothing, but she still has 25 years until she retires. How much money does she need to contribute per month to reach her goal? First compute how much money she will need at retirement, then compute the monthly contribution to reach that goal. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Contribution per month
Sherry has a goal of retiring with $434,849 by making weekly deposits into an investment account whose annual interest rate is 1.1%. If she will retire in 29 years, how much interest will she earn? Round your answer to the nearest dollar.. Just dont do handwritten.
Luis wants to have $2,000,000 in net worth when he retires. To achieve this goal, he plans to invest $10,000 each year (starting one year from now) into an account that earns 10% interest compounded annually. The amount of time before Luis can retire as a multimillionaire is how many years?
Aplesh
Solve manually using formulas. Xia has an inheritance in a trust fund left by her recently deceased mother thatwill pay 50,000 at the end of each year indefinitely into the future. She just turned 60years old and she believes that this perpetuity-immediate does not meet her retirementneeds. She wishes to exchange the value of her inheritance in the trust fund for a 5-yeardeferred annuity-immediate that provides annual payments for 20 years. If the trusteeagrees to her proposal, how much annual retirement income would she receive? Thetrust fund is earning an annual effective rate of interest of 5%.
Maryam's retirement scheme is in such a way that for the present year, she invests QR 250,000 (as Present Cash outflow) and she expects of the asset of QR 700,000 (Cash inflow) over 20 years. Assuming no deposits (A) made to his retirement account over the aforementioned 20 year period, what annual rate of return did she make? Hint: You may use RATE function in MS Excel to calculate the annual rate of return. 8.00% 4.22% 3.13% 5.28%
You believe you will need to have saved $480,000 by the time you retire in 30 years in order to live comfortably. You also believe that you will inherit $115,000 in 5 years. a) If the interest rate is 6% per year, what is the future value of your inheritance at retirement? b) How much additional money must you save to meet your retirement goal, assuming you save your entire inheritance?
Assume Sheryl Jenkins wants to accumulate $12,241.30 in two years. She currently has $10,919.00 to invest. What interest rate must she earn on her investment (that is if she deposits $10,919.00 today) to have $12,241.30 exactly two years from today?
Suppose a husband wants to take his wife on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $24,000 inheritance from an uncle and intends to invest it for the trip. The husband estimates the trip will cost $31,000 and he believes he can earn 8% interest, compounded annually, on his investment. Complete the following table to calculate the future value. Will he be able to pay for the trip with the accumulated investment amount? Note: Use tables, Excel, or a financial calculator. Round your final answers to the nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
a) When you retire 40 years from now, you want to have $1.2 million. You think you can earn an average of 12 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit? b) Some time ago, Julie purchased eleven acres of land costing $36,900. Today, that land is valued at $214,800. How long has she owned this land if the price of the land has been increasing at 10.5 percent per year?
Two people plan to invest $50,000. Matt is going to invest it in one lump sum and leave it in the account for 25 years to use for retirement. Sarah is going to invest $2000 per year for 25 years and will also use the money in the account for retirement. Is it reasonable to expect that Matt will have more money in his account than Sarah does in 25 years if both accounts earn the same interest?

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