Assume that you are 30 years old today and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be mad on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%. The present value (at age 30) of your retirement savings is closest to: OA. $87,000. OB. $46,600. O C. $75,230. OD. $108.000.

Assume that you are 30 years old today and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be mad on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%. The present value (at age 30) of your retirement savings is closest to: OA. $87,000. OB. $46,600. O C. $75,230. OD. $108.000.

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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You have just made your first $10,000 contribution to your individual retirement account. Assume you earn an annual rate of return of 12 percent compounded quarterly and make no additional contributions. What will your account be worth when you retire in 50 years?Note: Do not round intermediate calculations and round your answer to 2 decimal Blaces, e.g., 32.16. You need $20,000 to go on your dream vacation to South Africa. If you save $5,000 today in an account at 10% interest compounded annually, how long will you have to wait to go on your dream vacation?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
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You plan on retiring in 25 years. In order to increase your retirement income, you open a retirement. account today and make a $20,000 deposit. In addition, you will deposit $5,000 every year for the next 25 years. Your plan is to start making annual withdrawals of $50,000 from the account, after you retire. Assuming the account is earning 7% rate of interest, how many years will it take, after you retire, before. the funds in your account are completely exhausted. Please include a written answer in a text box. (Assume annual compounding)

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