Assume you are now 21 years old and will start working as soon as you graduate from college.You plan to start saving for your retirement on your 25th birthday and retire on your 65thbirthday. After retirement, you expect to live at least until you are 85. You wish to be able towithdraw $38,000 (in today's dollars) every year from the time of your retirement until youare 85 years old (i.e., for 20 years). The average inflation rate is likely to be 5 percent.Problem 6.42(a)X Your answer is incorrect.Calculate the lump sum you need to have accumulated at age 65 to be able to draw thedesired income. Assume that the annual return on your investments is likely to be 10percent. (Round answer to 2 decimal places, e.g. 15.25. Round intermediate value to 3 decimalplaces, e.g. 359400.312. Do not round factor values.)Lump sum amount accumulated at age 65$10463.384

First, we need to determine the first payment in retirement using the inflation rate of 5%. Today,…

Calculate the lump sum you need to have accumulated at age 65 to be able to draw the desired income. Assume that the annual return on your investments is likely to be 10 percent. (Round answer to 2 decimal places, e.g. 15.25. Round intermediate value to 3 decim 250400 31 Jusel

Calculate the lump sum you need to have accumulated at age 65 to be able to draw the desired income. Assume that the annual return on your investments is likely to be 10 percent. (Round answer to 2 decimal places, e.g. 15.25. Round intermediate value to 3 decim 250400 31 Jusel

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

See similar textbooks

Similar questions

Find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 7% per year. I need to know the value of G.
Valuation of Financial Instruments / Determine knowledge An annuity due pays $120,000 each year for 80 years. If the going rate of interest is 40 percent per year, the present value of this annuity due is $ Use the following formulas to complete this problem: PV=PMT [1-(1+r))) / r]*(1+3) or =PV (Rate, Nper, PMT, FV, Type).
Suppose that every 2 years beginning 3 years from now you will receive $151 in perpetuity. Assuming that the annual opportunity cost of capital is 7%, what is this stream of cash flows worth today? Round your final answer to two decimals.
Round percentages and ratios to the nearest tenth of a percent, dollars to nearest whole dollar. 1. a. ________dollars b. ________dollars c. ________% d. ________dollars Use the attached present and future value tables to answer the following questions: a) Tom needs to have $20,000 in his investment account in 7 years. If his account earns 6% interest per year, how much must he deposit today in order to have $20,000 7 years from now? b) If, instead, Tom deposits $2,000 each year in the account for the next 7 years, how much will he have in the account at the end of 7 years? c) Tom wants to buy a vehicle for the business. The sticker price is $28,000. The dealer is offering him an annual payment plan of $5,873.72 per year for 6 years if he wants to finance the vehicle. What annual interest rate is the dealer charging? d) Tom pays $2,400 per year for rent on the first of January each year. He wants to deposit an amount in his 6% investment today that will allow…
188. Subject :- Finance
None
Choose the letter/s of the correct answer/s. In an investor’s perspective, which among these has the best potential for your money to grow, using the samepresent amount? Assume compound interest methods.A. i = 3.67%, f = 1.16%, n = 20 yearsB. r = 25%, m = 3; n = 15 yearsC. i = 4%, f = 2%, n = 18 yearsD. r = 15%, m = 2, n = 7 years
Find the amount needs to be invested if the investors want to receive an annual net income worth 5,400,000 for 7 years Use the Hoskold's Formula to compute the price if the money is worth 8% on sinking fund and the yield of interest is 59 Price: || (2 decimal places only)
find the final amount in this retirement account, in which the rate of return on the account and the regular contribution change over time 1500$ per quarter invested at 7.9% compound quarterly , for 20 years, then 1000$ per quarter invested at 6.8% compund quarterly for 10 years. answer is about 620,187$
Calculate the future value in five years of $4,000 received today if your investments pay for the following interest rates. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) 6 percent compounded annually b. 8 percent compounded annually a. C. 10 percent compounded annually d. 10 percent compounded semiannually 10 percent compounded quarterly e. Future Value
By using formula please;;
You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $24,900 at the end of this year and subsequent payments that will grow at a rate of 2.9 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity? (Round answer to 2 decimal places, e.g. 15.25.) Present value $ ?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS