None 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?

Part (a): Annual Savings for Retirement OnlyWe are solving this in two steps:Step 1: Calculate the…

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 19P

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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?
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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.
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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?
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Please correct with concept and not handwritten
Don't provide handwritten solution. A couple will retire in 40 years; they plan to spend about $31,000 a year (in current dollars) in retirement, which should last about 20 years. They believe that they can earn a real interest rate of 7% 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 15 years they will need to spend $61,000 on their child’s college education? USE EXCEL
28. A couple will retire in 50 years; they plan to spend about $30,000 per year in retirement, which should last about 25 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 is made in one year. (Round your answer to the nearest cent.) b. 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 university or college education? (Round your answer to the nearest cent.)
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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 8% interest on retirement savings. (Do not include the pound sign (£). Do not round intermediate calculations. Round your final answer to 2 decimal places (e.g. 36.16). 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. b ) How would the answer to part (a) change if the couple also realize that in 20 years, they will need to spend £30,000 on their child's college education?

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