An engineer currently has nothing saved for his retirement, which will start 6 years from today. He wants to receive P68,500 each year for 5 years during retirement. The first of these payments will be received 6 years from today. He can earn a return of 7.6% per year in his account. How much does this engineer need to save each year for 6 years to have exactly enough to meet his retirement goal if he makes his first contribution to savings one year from today and all contributions are equal? Show complete manual computation with cash flow diagram.

An engineer currently has nothing saved for his retirement, which will start 6 years from today. He wants to receive P68,500 each year for 5 years during retirement. The first of these payments will be received 6 years from today. He can earn a return of 7.6% per year in his account. How much does this engineer need to save each year for 6 years to have exactly enough to meet his retirement goal if he makes his first contribution to savings one year from today and all contributions are equal? Show complete manual computation with cash flow diagram.

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

Suppose you wish to retire 38 years from today. You determined that you need $220,000 per year after you retire, with the first retirement funds withdrawn one year from the day you retire and that you will need to make 30 such withdrawals. Assuming that you can earn 5% per year on your retirement funds for the next 70 years. C. How much is left in your account after you make your 22nd withdrawl?
You have just retired with savings of $4 million. If you expect to live for 57 years and to earn 13% a year on your savings, how much can you afford to spend each year (in $ dollars)? $_______. (Assume that you spend the money at the start of each year.)
1. In order to save $57,000 in five years, John will start saving money next month. He already has $10,000 in his account. The account is paying him 0.1 percent interest per month. In order to have $57,000 in five years, how much will he have to deposit into that account each month? (Show work)
Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage. Assuming he gets an interest rate of 9% compounded annually, how much will he have to invest today, to reach his retirement goal?
You are saving for retirement. To live comfortably, you decide you will need to save $4 million by the time you are 65. Today is your 34th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 3%, how much must you set aside each year to make sure that you will have $4 million in the account on your 65th birthday? The amount to deposit each year is $(Round to the nearest dollar.)
A 30 year old person plans to retire at age 65 with an equivalent lump sum of $1,000,000. They currently have $50,000 saved. How much more will they need to save constantly every year until retirement in order to accumulate the required lump sum if all savings earn a net total return of 6% pa?
2. a. Jake is 10 years from retirement. He has decided that in order to be comfortable and be able to travel, he needs to have an income of $8000 per month. How much does he need ta have in his retirement that earns 8% per year compounded monthly, in order to withdraw S8000 per month for 30 years?
You want to accumulate $1,250,000 prior to retirement. If you can earn 10% per yr. and have the next 30 years to save every month, how much would you need to save at the beginning of every month to fulfill your wishes?
You intend to buy a vacation home in seven years and plan to have saved $50,000 for a down payment. How much money would you have to place today into an investment that earns 8% per year to have enough for your desired down payment?
When John Michael retired, he had a retirement account with a $910,000 balance. He decided that he would use this account to provide 30 years of equal monthly payments. It is now 19 years later and John Michael just received his 228th montly check. Looking ahead, he can see that he needs to stretch his payments over another 16 years rather than the eleven more he had originally planned. If he does this, how large will his new montly payments be? Assume he earns interest at the APR of 9% compounded monthly throughout his retirement.
Vijay
Happy birthday! You are 30 years old today. You want to retire at age 60. You want to have $2, 900, 000 at retirement. Realistically, you know that the most that you can save from your 31st birthday until your 50th is $6, 250 per year (you only save on your birthdays!). How much do you have to save each year from your 51st to your 60th birthday in order to achieve your retirement goal if you can earn 6.5% on your savings?

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