34. At age 20, you begin depositing $50 each month into an account. Now suppose that at age 40, you finally get a job where your employer puts $400 per month into an account. You continue your $50 deposits, so from age 40 on, you have two separate accounts working for you. Assume that each account considered has an APR of 6% compounded monthly. What will be the total value of your nest egg when you retire at age 65? (total sum of two accounts)

34. At age 20, you begin depositing $50 each month into an account. Now suppose that at age 40, you finally get a job where your employer puts $400 per month into an account. You continue your $50 deposits, so from age 40 on, you have two separate accounts working for you. Assume that each account considered has an APR of 6% compounded monthly. What will be the total value of your nest egg when you retire at age 65? (total sum of two accounts)

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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Similar questions

You want to retire with at least $1,500,000 in the bank and figure you will continue working for another 40 years. After all of your expenses you can only afford to save $250 a month. What is the lowest interest rate you will need to earn to ensure you meet your retirement goal?
When you retire at 65, you wish to be able to have $3,000 each month for 25 years. How much would you have to deposit into an account each month, starting when you are 23, if the account earns 7.6% compounded monthly?
You are 30 years old today. You want to retire at the age of 55. You expect to live until age 90. You would like to have a monthly income of $9,000 per month in retirement. How much do you have to save per month during your working years in order to achieve your retirement goal? Assume end of period payments. Assume an annual interest rate of 3.5% in retirement and 5% during your working life. How much do you have to save per month during your working years in order to achieve your retirement goal? $ (Round to the nearest cent.)
Suppose that you just turned 25, plan to retire at 65, and estimate that you will need $9,049 per month at the end of each month upon retirement for the next 30 years. How much do you need to contribute at the end of each month until you reach age 50? Assume your estimated return is 8.8% EAR, that you have $10,000 already invested, and the funds will continue to earn interest to age 65, even though you will not continue contributing after age 50.
Starting early, starting late. In this exercise, we consider the effects of starting early or late to save for retirement. Assume that each account considered has an APR of 6% compounded monthly. a. At age 20, you realize that even a modest start on saving for retirement is important. You begin depositing $50 each month into an account. What will be the value of your nest egg when you retire at age 65? b. Against expert advice, you begin your retirement program at age 40. You plan to retire at age 65. What monthly contributions do you need to make to match the nest egg from part a? c. Compare your answer to part b with the monthly deposit of $50 from part a. Also compare the total amount deposited in each case. d. Let's return to the situation in part a: At age 20, you begin depositing $50 each month into an account. Now suppose that at age 40, you finally get a job where your employer puts $400 per month into an account. You continue your $50 deposits, so from age 40 on, you have two…
You currently have a balance of $200,000 in your retirement account. You expect to contribute $7,50o to your retirement account at the end of each year for the next 30 years and your employer will match your contributions; thus, the annual end- of-year contributions to your retirement account will be $15,000. If you earn 8% on your retirement account, how much money will you have in your account when you retire in 30 years? You have a 4-year-old daughter and want to have $120,000 in her college fund when she starts college. You expect to earn a 7% return on her college-fund investments. If you want to make 14 equal-sized end-of-year deposits into your daughter's college fund, how much do you need to deposit each year to have $120,000 when she starts college? $ %24 %24
Calculate the amount of money you would be saving for a month by no longer spending $10. Please show your work. If you were to retire at 65, find the number of years left for you to retire. Show calculations. If you were to invest the monthly savings (every month) in an account that gives you 7% interest compounded monthly, calculate the amount of money you would have in your retirement account (at age 65) by making this one change in your lifestyle. Show all the steps.
You have just made your first $5,000 contribution to your retirement account. Assume youearn a return of 10 percent per year and make no additional contributions.a. What will your account be worth when you retire in 45 years?b. What if you wait 10 years before contributing?c. After calculating parts a and b, what is the lesson learned?
At 24, you finish college and are fortunate enough to have a job waiting for you. Your first job has a starting salary of $75,000 per year. This salary is expected to increase by $5,000 each year. You decide to start saving for retirement right away. Each year you invest 5% of the year’s salary in an account that earns 10% interest, compounded yearly. For simplicity, assume the deposit is made at the END of each year (so if age 24 is t = 0, then the first deposit will be at age 25). If you continue to save in this manner, how much will be in your retirement account immediately after you make the deposit at age 45?
You want to have $1,000,000 in your retirement account by the time you turn 65. You are currently 25 years old and have not yet started saving for your retirement. If your 401K from work claims the average annual growth is 6%, how much do you need to save each month to have $1,000,000 when you retire? A. $1,442.01 each month B. $502.14 each month C. $2,083.33 each month D. $104.33 each month

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