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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Eugene began to save for his retirement at age 35, and for 15 years he put $ 325 per month into an ordinary annuity at an annual interest rate of 8% compounded monthly. After the 15 years, Eugene was unable to make the monthly contribution of $ 325, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 15 years until he was ready to retire. How much money did he have for retirement? If Eugene had waited until he was 44 years old to start saving for retirement and then decided to put money into an ordinary annuity for 21 years earning 8% interest compounded monthly, what monthly payment would he have to make to accumulate the same amount for retirement as you found in the first part of the question?
Your bank offers a savings account that pays 2.5% interest, compounded annually. If you invest $1,000 in the account, then how much will it be worth at the end of 25 years?
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.
Stacey deposits $ 4500 at the end of each year for 30 years into an investment fund which pays out interests at annual effective interest rate of 3 %. He is only able to reinvest this interest at an annual effective interest rate of 2 %. What is the accumulated value of his investments at the time of the last investment. Explain your work.
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?
Jodan received an amount of GHc 1000 from his grandpa as a birthday gift. He decides to invest the money at 15%f for five years. What is the amount receivable at the end of five years ?
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?
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
Tõnu has two financial goals. His first wish is to retire 40 years from now and receive a pension of 10,000 euros every month for 20 years. Secondly, his big desire is to leave an inheritance of 1,000,000 euros to his daughter Karin after his death, which will occur exactly 20years after retiring. It is known that for the first 10 years starting from today, Tõnu can save a maximum of 1,200 euros each month. Assume, that the interest rate is 6% per year (or 0.5% per month), and it does not change over the entire observed period. Question: Given all the previous information, try to find out how much Tõnu needs to save additionally each month after the first 10 years have passed?

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