4. Amy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she retires. She estimates that she will be able to earn an interest rate of 10.1%, compounded annually, throughout her lifetime. To reach her retirement goal, Amy will make annual contributions to her account for the next 30 years. One year after making her last deposit, she will receive her first retirement check. How large must her yearly contribution be?

4. Amy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she retires. She estimates that she will be able to earn an interest rate of 10.1%, compounded annually, throughout her lifetime. To reach her retirement goal, Amy will make annual contributions to her account for the next 30 years. One year after making her last deposit, she will receive her first retirement check. How large must her yearly contribution be?

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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Kate is 28 years old today and is beginning to plan for her retirement . She wants to set aside an equalamount at the end of each of the next 37 years so that she can retire at age 65 . She expects to live to the maximum ageof 90 and wants to be able to withdraw $250,000 per year for 25 years from the account on her 66th through 90th birthday. The account is expected to earn 5% annually. Determine the size of the annual deposit by kate
You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does the same starting at age 35 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 60? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 60?-Select-You haveYour sister hasItem 3 the larger amount.
Sherry has a goal of retiring with $427,480 by making weekly deposits into an investment account whose annual interest rate is 1.1%. If she will retire in 25 years, how much interest will she earn?
Isabelle wants to save for retirement. She earns $5400 in income each month, and wishes to deposit 10% of her income into a savings acount each month. If the savings account has a nominal interest rate of 7%, compounded monthly, how much will be in the account if she retires in 35 years?
A couple is saving for retirement with three different accounts. The table below shows the current balances in their accounts, along with their yearly contribution, and the yearly return on each account. The couple will retire in 24.00 years and pool the money into a savings account that pays 4.00% APR. They plan on living for 30.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal? Yearly Contribution $1,000.00 Account Fidelity Mutual Fund Vanguard Mutual Fund Employer 401k Balance $21,452.00 $183,845.00 $307,061.00 Submit Answer format: Currency: Round to: 2 decimal places. $10,000.00 $15,000.00 APR 7.00% 7.00% 6.00%
Andrea, a self-employed individual, wishes to accumulate a retirement fund of $250,000. How much should she deposit each month into her retirement account, which pays interest at a rate of 4.5%/year compounded monthly, to reach her goal upon retirement 20 years from now? (Round your answer to the nearest cent.
Suppose you wish to retire 38 years from today. You determined that you need $220,000 per year after you retire, with the first retirement funds withdrawn one year from the day you retire and that you will need to make 30 such withdrawals. Assuming that you can earn 5% per year on your retirement funds for the next 70 years. C. How much is left in your account after you make your 22nd withdrawl?
Mr. Reyes wants to retire 15 years from now. Aside from the retirement benefits from his company and the social security benefits that he will get, Mr. Reyes wants to have an additional 2 million pesos when he retires. To achieve this goal, he will make equal annual deposit at the end of each year for the next 15 years in an account that earns 5% interest per annum. How much should Mr. Reyes deposit each year?
You want to be able to withdraw $50,000 from your account each year for 25 years after you retire. You expect to retire in 15 years. If your account earns 7% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
Adele is planning for retirement. She would like to have $75,000 in her hand at the beginning of her first year of retirement at age 65 to live on for the year. She estimates that the amount will have to grow by 6% every year to keep up with inflation. What APR (nominal rate per year) should her retirement account earn if it is compounded continuously? She plans to deposit $21,000 on her 40th birthday and plans to keep increasing the deposits by 6% every year and till her 64th birthday. She estimates her life expectancy to be 85, meaning she would like to have the last retirement payment on her 85th birthday.
Mia plans to save for retirement starting at the age of 35 (year O). She will make a payment at the beginning of each year until age 64. Starting from age 65, she will withdraw 100,000 USD every year for 20 years until her age of 84. Her account balance will reach to $0 at the beginning of her age 85. The retirement plan Mia is looking at provides a interest rate of 10% annually. What would be the fair annual payment for 30 years of this retirement plan? $5175.61 $4275.33 $5293 $53669
Sehar has accumulated $245,000 in her retirement savings plan. When she retires in exactly 4 years from today, she will purchase an annuity that will provide end-of-month payments for 20 years. If her funds earn 6% compounded quarterly during both the period of deferral and the annuity period, how much will her Sehar’s monthly payments be during retirement?

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