Hi expart please help answer the general accounting question A couple will retire in 40 years; they plan to spend about$39,000 a year in retirement, which should last about 20 years.They believe that they can earn 8% interest on retirementsavings.a. If they make annual payments into a savings plan, howmuch will they need to save each year? Assume the firstpayment comes in 1 year.b. How would the answer to part (a) change if the couple alsorealizes that in 15 years they will need to spend $69,000 ontheir child's college education?

Approach to solving the question: For better clarity of the solution, I have attached the Excel…

Answered: A couple will retire in 40 years; they…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 43P

See similar textbooks

Similar questions

A couple will retire in 50 years; they plan to spend about $26,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 9% on retirement savings. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $56,000 on their child’s college education?
A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 10 percent interest on retirement savings. If they make annual payments into a savings plan, how much will they need to save each year? Assume, the first payment comes in at the beginning of the year. How would the answer to part (a) change if the couple also realize that in 20 years, they will need to spend $ 60,000 on their child’s college education?
A couple will retire in 50 years; they plan to spend about $32,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 9% on retirement savings. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $62,000 on their child's college education? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
A couple will retire in 50 years; they plan to spend about $34,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 7% on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual savings $ Annual savings 761.74 b. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $64,000 on their child's college education? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 1,370.95
A couple will retire in 40 years; they plan to spend about $33,000 a year in retirement, which should last about 20 years. They believe that they can earn 8% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. How would the answer to part (a) change if the couple also realize that in 15 years they will need to spend $63,000 on their child’s college education?
A couple will retire in 40 years; they paln to spend about $23,000 a retirement, which should last about 20 years. They believe that they can earn 9% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? b. How would the answer to part (a) change if the couple realizes that in 15 years they will need to spend $63,000 on their childs college education?
Please correct with concept and not handwritten
Please answer this question
A couple will retire in 30 years: they plan to spend about $30,000 a year (in real value) in retirement, which should last about 20 years. They believe that they can earn 6% nominal return on retirement portfolio account. The inflation rate over the next 50 years is expected to average 2%. a) What is the nominal value of the retirement fund the couple must have by the time they retire in 30 years to make it possible? b) How much do they need to save in nominal terms each year to create the retirement fund in part a)? c) If the couple successfully achieve their goal, what will be their nominal expenditures in the last year of retirement (year 50)?
c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70.If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age?
Finding the required interest rate Your parents will retire in 29 years. They currently have $400,000, and they think they will need $1,100,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Suppose a man retires at age 65, and in addition to Social Security, he needs $2200 per month in income. Based on an expected lifetime of 204 more months, how much would he have to invest in a life income annuity earning 4% APR to pay that much per year? (Round your answer to two decimal places.)

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS