4. a. b. C. d. 5. a. b. C. You plan on retiring in forty years and are contemplating retirement. you invest $2,000 a year in an IRA compounded at 6% APR, how much will you have when you retire? You decide you will need about $500,000 when you retire. How many years will you have to work to accumulate the $500,000 at $2,000 per year at 6% APR? If you want to retire in 40 years and have $500,000 (i.e. you want your cake and eat it too), how much will your annual deposits have to be at 6% APR? You figure the tax law isn't going to change and the maximum annual deposit will remain $2,000. What interest rate will you have to earn to still have $500,000 in 40 years? You hit the lottery for $1 million dollars. The state has given you a couple of payment options. They offer annual payments of $50,000 for 20 years. How much could you sell (discount) this for to a structured settlement company like J.G. Wentworth that will give you 8% APR? What if Wentworth gives you 6% APR? If the state offers a lump sum distribution of $500,000, which option will you choose?
4. a. b. C. d. 5. a. b. C. You plan on retiring in forty years and are contemplating retirement. you invest $2,000 a year in an IRA compounded at 6% APR, how much will you have when you retire? You decide you will need about $500,000 when you retire. How many years will you have to work to accumulate the $500,000 at $2,000 per year at 6% APR? If you want to retire in 40 years and have $500,000 (i.e. you want your cake and eat it too), how much will your annual deposits have to be at 6% APR? You figure the tax law isn't going to change and the maximum annual deposit will remain $2,000. What interest rate will you have to earn to still have $500,000 in 40 years? You hit the lottery for $1 million dollars. The state has given you a couple of payment options. They offer annual payments of $50,000 for 20 years. How much could you sell (discount) this for to a structured settlement company like J.G. Wentworth that will give you 8% APR? What if Wentworth gives you 6% APR? If the state offers a lump sum distribution of $500,000, which option will you choose?
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
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Transcribed Image Text:4.
a.
b.
C.
d.
5.
a.
b.
C.
You plan on retiring in forty years and are contemplating retirement.
If you invest $2,000 a year in an IRA compounded at 6% APR, how much will you have when you
retire?
You decide you will need about $500,000 when you retire. How many years will you have to work to
accumulate the $500,000 at $2,000 per year at 6% APR?
If you want to retire in 40 years and have $500,000 (i.e. you want your cake and eat it too), how much
will your annual deposits have to be at 6% APR?
You figure the tax law isn't going to change and the maximum annual deposit will remain $2,000.
What interest rate will you have to earn to still have $500,000 in 40 years?
You hit the lottery for $1 million dollars. The state has given you a couple of payment options.
They offer annual payments of $50,000 for 20 years. How much could you sell (discount) this for to a
structured settlement company like J.G. Wentworth that will give you 8% APR?
What if Wentworth gives you 6% APR?
If the state offers a lump sum distribution of $500,000, which option will you choose?
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