A person would like to receive Rs.30000 monthly as pension after his retirement (60 years). To receive this amount, he plans to invest some equal amount every quarter when he attains the age of 42. He continued this investment for 5 years. However, after 5 years he doubles the investment amount but invests with a frequency of semi- annual period for the next 10 years. During the last three years of his service, he invests an amount five times his initial investment, on a monthly basis. Assuming that he lives for 20 years after retirement, calculate the amount to be invested if the interest rate is 7 percent per annum compounded monthly during the first fifteen years and increases to 12 percent per annum compounded monthly thereafter.

A person would like to receive Rs.30000 monthly as pension after his retirement (60 years). To receive this amount, he plans to invest some equal amount every quarter when he attains the age of 42. He continued this investment for 5 years. However, after 5 years he doubles the investment amount but invests with a frequency of semi- annual period for the next 10 years. During the last three years of his service, he invests an amount five times his initial investment, on a monthly basis. Assuming that he lives for 20 years after retirement, calculate the amount to be invested if the interest rate is 7 percent per annum compounded monthly during the first fifteen years and increases to 12 percent per annum compounded monthly thereafter.

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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Similar questions

Mr. Arman has decided to start saving for his retirement. Beginning on his twenty-sixth birthday, Arman plans to deposit Tk. 12,000 each birthday into a saving account earning 10% compound annual interest rate. He will continue this saving program for a total of 10 years andthen stop payments. But his savings will continue to compound at 12% for 30 more years, until he retires at the age of 65. Mr. Jamal also plans to deposit Tk. 12,000 a year in a saving account on each birthday at 12%, and will do so for a total of 35 years. However, Jamal will not begin his contributions until his thirty-first birthday. How much will Mr. Arman’s and Mr. Jamal’s savings programs be worth at the retirement age of 65? Who will be better off financially at retirement, and by how much? (Assume annual compounding for each case).
A 35-year old man is considering a lavish personal pension plan paying 50,000monthly annuities for 5 years that should start when he reaches 55. He makes quarterlydeposits now on the account bearing a constant interest rate of 2.5% per annum for 5-years and plans to place the total balance accrued on time deposit. All interests are at 2.5%per annum except for the time deposit that bears 8.0% annual interest. 1. What is the present value of his pension plan?2. What is the present value of the 5-year quarterly deposits?3. How much is the 5-year quarterly deposits?4. Construct a cash flow diagram for the repayment scheme5. Construct the amortization table for the deposits.
John has invested in an annuity policy fund which requires him to place an annual deposit of $10,000 for the next 20 years. During this period, an interest rate of 10% p.a. will be earned for the first 5 years, followed by an interest rate of 8% p.a. for the next 5 years and 6% p.a. for the remaining years. Compute the accumulated amount at the end of 20 years. Please answer fast i give you upvote.
To ensure his retirement income, a 40-year old man plans to purchase annuity when he turns 65. The annuity will pay $7,500 at the end of each month for 20 years, and the value is calculated at 5% interest, compounding monthly. To pay for this annuity, he starts making annual level deposits in a mutual fund, which earns 8% interest each year. He makes the first one right away, and makes deposits at the beginning of each year for 25 years. How much does he need to deposit each year in order to save enough to buy his annuity?
Mr. White is updating his estate plan for himself and his family. He would like to provide an income of $3000 every month starting 10 1/2 years from now and continuing for the next 20 years. He has started his account with an initial deposit of $10,000 and he knows his life insurance, maturing in 5 years, will have a cash value of $150,000. To make up the difference , Mr. White has decided to make monthly deposits in the account. How much should each deposit be if all interest is computed at 6% compounded monthly?
An individual has $1,000 to invest and wants to accumulate $1,470 in 5 years. What interest rate, compounded semiannually, must be earned to accomplish the objective?
Cosette will retire in 35 years. To that end she contributes S900 per month to her 401-kaccount during the first 20-years, then stops her contributions and lets the funds compound for the next 15 years. How much would her account hold at retirement if she earned an annual rate of 11.5% monthly compounded?
Four years ago, Leroy invested $12,600.00. Today, he has $20,700.00. If Leroy earns the same annual rate implied from the past and current values of his invsetment, then in how many years from today does he expect to have exactly $50,600.00 O 7.20 years (plus or minus 0.05 years) 7.57 years (plus or minus 0.05 years) O 6.25 years (plus or minus 0.05 years) 11.20 years (plus or minus 0.05 years) None of the above is within .05 percentage points of the correct answer
Mrs. Nash will contribute $200 to her RRSP at the end of each month for 15 years. How much more will she have for retirement if she contributes $225 at the end of each month for the same period of time, if her investments earn 11.7% compounded monthly? O 24,279.46 O 12,139.73 O 43.281.90 O 21,640.95

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