A young engineer's stating salary is 56,000. The engineer expects annual raises of 3%. The engineer deposit 15% of the annual salary at the end of each year in a savings account. What is the savings interest rate must be so that there will be $200, 000 in savings for a business start-up after 15 years? Your spreadsheet must include at least columns for the year (year 1, year 2 .), the year's salary, the year's deposit, and the year's cumulative savings. Show the formula you use for calculation.

A young engineer's stating salary is 56,000. The engineer expects annual raises of 3%. The engineer deposit 15% of the annual salary at the end of each year in a savings account. What is the savings interest rate must be so that there will be $200, 000 in savings for a business start-up after 15 years? Your spreadsheet must include at least columns for the year (year 1, year 2 .), the year's salary, the year's deposit, and the year's cumulative savings. Show the formula you use for calculation.

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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A young engineer’s starting salary is $52,000. The engineer expects annual raises of 3%. The engineer will deposit 10% of the annual salary at the end of each year in a savings account that earns 4%. How much will the engineer have saved for starting a business after 15 years? We suggest that the spreadsheet include at least columns for the year, the year’s salary, the year’s deposit, and the year’s cumulative savings.
A young engineer’s starting salary is $65,000. The engineer expects annual raises of 2.5%. The engineer will deposit a constant percentage of annual salary at the end of each year in a savings account that earns 5%. What percentage must be saved so that there will be $1 million in savings for retirement after 35 years?
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Arnie invests $18,400 in an account that pays an annual interest rate of 15 %. How much money does he have in the account after one year? Solve the problem by first formulating an equation. Enter the solution in the answer box AND Upload your work. Your Answer: Answer
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After completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 30 years from now. So, you are thinking about creating a fund that will allow you to receive $40,000 at the end of each year for 25 years after your retirement. The interest rates are expected to be 2.25% per annum during the 30year pre- retirement period and 1.75% during the retirement period. Required: a) To provide the 25- year, $40,000 a year annuity, calculate how much should be in the fund account when you retire in 30 years. b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 2.35% per year during the 30 years preceding your retirement?c) What effect would a change (increase/decrease) in the interest rates, both during and prior to retirement, have on the values calculated in parts (a) and (b)? Explain why. d) (Using different interest rates) Assume that the…
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