4. You are planning your retirement in 15 years. You currently have $125,000 in a bond account and$400,000 in a stock account. You plan to add $5,000 per year at the end of each of the next 15 yearsto your bond account. The stock account will earn a 9 percent return and the bond account will earn apercent return. When you retire, you plan to withdraw an equal amount for each of the next 22 yearsat the end of each year and have nothing left. Additionally, when you retire you will transfer yourmoney to an account that earns 5,50 percent. How much can you withdraw each year?6$164,492.27b. $148,854.06$141,085.36d. $148,845.06e. $141,058.36

Retirement refers to the period in a person's life when they cease working and typically withdraw…

4. You are planning your retirement in 15 years. You currently have $125,000 in a bond account and $400,000 in a stock account. You plan to add $5,000 per year at the end of each of the next 15 years to your bond account. The stock account will earn a 9 percent return and the bond account will earn a 6 percent return. When you retire, you plan to withdraw an equal amount for each of the next 22 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 5,50 percent. How much can you withdraw each year? $164,492.27 $148,854.06 $141,085.36 d. $148,845.06 e. $141,058.36

4. You are planning your retirement in 15 years. You currently have $125,000 in a bond account and $400,000 in a stock account. You plan to add $5,000 per year at the end of each of the next 15 years to your bond account. The stock account will earn a 9 percent return and the bond account will earn a 6 percent return. When you retire, you plan to withdraw an equal amount for each of the next 22 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 5,50 percent. How much can you withdraw each year? $164,492.27 $148,854.06 $141,085.36 d. $148,845.06 e. $141,058.36

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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3. Suppose that you have a savings plan that pays 2.5% compounded monthly. You make payments of $75 at the end of each month for 15 years, and then you make monthly payments of $110 for an additional 6 years. a) What is the value of the account at the end of 21 years? b) How much did you earn in interest during those 21 years? 4. Three years after buying 200 shares of XYZ stock for $25 per share, you sell the stock for $8,500. Find the total and annual return.
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $60,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 6.6% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday?
1) earn 8 percent interest per year, compounded annually. You will not withdraw any principal or interest until you retire in 48 years. Which one of the following statements is correct? Assume you deposited $6,000 into a retirement savings account today. The account will A) The interest you carn in Year 7 will equal the interest you earn in Year 14. B) The interest amount you earn will double in value every year. C) The total amount of interest you will earn will equal $6,000 x .08 x 48. D) The present value of this investment is equal to $6,000. E) The future value of this amount is equal to $6,000 x (1 + 48)".
You are currently 25 years old and landed your first job. Your retirement plan will make monthly contributions for $1,000 for the next 40 years. Assume your portfolio puts $600 into the S&P 500 which receives an average 12% annual return and $400 into a bond fund which will give a 8% annual return. If you retire at 65 and plan to live until you’re 90, what can you withdraw monthly assuming a risk-free rate of 4%?
when you retire 40 years from now you plan to make 10 annual withdrawals from your savings accounts at the end of each year, until the 50th year. You will need 131,480 each year for 2 years, then 143,827 each year for 3 years and 166,728 each year for 5 years. You want to start saving for retirement now and plan to make annual payments for 20 years into an account that yields 8 percent compounded annually. After these deposits you plan to leave the money in the savings account until retirement earning the same interest. What should these annual payments be in order to satisfy your retirement needs? Assume end of year payments.
You are planning to save enough to retire in 40 years. To do this, you will invest $1,000 at the end of each month in a stock account and $500 at the end of each month in a bond account. The stock account is expected to give 8% APR, compounded monthly. The bond account is expected to give 4% APR, also compounded monthly. When you retire, you will combine the two accounts and invest in an account that will earn 6% APR. How much will you withdraw from your post-retirement account every month if your withdrawal period is 25 years?
You are planning to save for retirement over the next 35 years. To do this, you will invest $619 per month in a stock account and $373 per month in a bond account. The return of the stock account is expected to be 7 percent, and the bond account will return 4 percent. When you retire, you will combine your money into an account with a return of 8 percent. How much can you withdraw each month from your account assuming a 30-year withdrawal period?
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 10.5% per year on your investments and you plan to retire in 36 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 10.5% in retirement)? d. If, instead, you decide to withdraw $270,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
Suppose your parents deposit $4,000 into an account at the end of each year for 11 years. The account earns an annual interest rate of 1.4%. After the final deposit, they move the accumulated savings to a brokerage account and invest in the stock market, where they earn an average annual return of 6.9% for the following 16 years. How much will they have in the account at the end? O a. $131,280 O b. $404,155 O c. $137,311 O d. $296,336 e. $302,138 f. $279,603 g. $496,270 h. $249,511

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