4. (a) If you will be making equal deposits into a retirement account for 10 years (with each payment at the end of the year), how much must you deposit each year if the account carns 10% compounded annually and you wish the account to grow to $5,000,000 after 40 years (in time 40)? (b) How does your answer to part (a) change if the account pays interest compounded monthly at an annual rate of 10% ? Note: use monthly compounding for all calculations.

4. (a) If you will be making equal deposits into a retirement account for 10 years (with each payment at the end of the year), how much must you deposit each year if the account carns 10% compounded annually and you wish the account to grow to $5,000,000 after 40 years (in time 40)? (b) How does your answer to part (a) change if the account pays interest compounded monthly at an annual rate of 10% ? Note: use monthly compounding for all calculations.

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

To prepare for retirement, you are going to deposit money into a pension plan account every month for the next 25 years. The pension plan has a 6.96% annual rate that compounds monthly. How much money will be in the account after 25 years if for the next 25 years you deposit $465.86 into the pension plan every month? First find the interest rate per period to four decimal places: i = Next find the total number of deposits: n = Finally, find the total amount of money in the account after 25 years: FV =
You wish to save P2,500,000 for your retirement by saving a certain sum every month for the next 40 years. If you can earn 9% compounded monthly, and you make your deposits at the beginning of each month, how much would you have to deposit each month to achieve your objective? a. P616.59b. P534.04c. P565.67d. P530.06e. None of the above
You will make equal deposits into your retirement account each year for 10 years starting now (i.e., years 0–9). If you expect to withdraw $50,000 per year forever beginning 30 years from now, and the funds will earn interest at 10% per year, the size of the 10 deposits is nearest: (a) $4239 (b) $4662 (c) $4974 (d) $5471
4. The amount that must be set aside today to enable annual payments of $40,000 each for 5 years, beginning at the end of the first year. The annual interest rate is 6%. 5. The amount one would have in a retirement account if they deposit $3,500 per year beginning immediately, for a total of 30 years. The annual interest is 5%. 6. The amount one would have in a retirement account if they deposit $2,300 per year beginning at the end of the first year, for a total of 30 years. The annual interest is 5%.
Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $500 per month for the next 25 years. Given a 9.0 percent interest rate, what is the value of your retirement plan after the 40 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value of multiple annuities $ 51,158 72
A person wants to withdraw $1000 every month, for 21 years, to supplement their pension check when they retire. a. How much money must be in an account that pays 7% interest compounded monthly, in order to meet their needs? b. How much money must be deposited into an account that pays 6.6% interest compounded monthly in order to achieve this amount? The monthly deposits will be made for 45 years C. How much money was actually deposited in to the account? d. How much money will actually be paid out from this account?
How much money will you have available to you after five years if you put aside $100.00 a month in an account that gives you 6.75% interest compounding monthly?
You would like to have $550,000 when you retire in 40 years. How much should you invest each quarter if you can earn a rate of 3.6% compounded quarterly?a) How much should you deposit each quarter?b) How much total money will you put into the account?c) How much total interest will you earn?
At an interest rate of 8% per year, the amount you must deposit in your retirement account for years 0 - 15 (16 deposits) if you want to be able to withdraw $60,000 a year forever beginning 30 years from now is closest to
You believe you will spend $47,000 a year for 13 years once you retire in 26 years. If the interest rate is 7% per year, how much must you save each year until retirement to meet your retirement goal? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual savings
How much would you still owe at the end of the first year, after you have made the first payment?
How much do you have to deposit today so that beginning 11 years from now you can withdraw $12,000 a year for the next 6 years (periods 11 through 16) plus an additional amount of $24,000 in the last year (period 16)? Assume an interest rate of 9 percent.

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