Carlos has an opportunity to save $205 per month at an APR of 4.55% in a 401K plan through work. He plans to retireIn 20 years. The income taxes are at 30% for him.(1) If Carlos's company offers a 35% matching contribution, how much would the company contribute to Carlos's401K by the time he retires?(Express your answer rounded correctly to the nearest cent)(2) If Carlos's company offers a 35% matching contribution, use Excel's FV function to determine how much hisInvestment will be worth when he retires.(Express your answer rounded correctly to the nearest cent)(3) How much will Carlos have deposited into the account by the time he retires?(Express your answer rounded correctly to the nearest centi)%24

Time Value of money is a concept in which a $1 today is worth more than $1 in future, this is…

Carlos has an opportunity to save $205 per month at an APR of 4.55% in a 401K plan through work. He plans to retire In 20 years. The income taxes are at 30% for him. (1) H Carlos's company offers a 35% matching contribution, how much would the company contribute to Carlos's 401K by the time he retires? (Express your answer rounded corectly to the nearest cent) (2) f Carlos's company offers a 35% matching contribution, use Excel's FV function to determine how much his Investment will be worth when he retires. (Express your answer rounded correctly to the nearest cent) 3 How much will Carlos have deposited into the account by the time he retires? (Express your answer rounded correctly to the nearest cent)

Carlos has an opportunity to save $205 per month at an APR of 4.55% in a 401K plan through work. He plans to retire In 20 years. The income taxes are at 30% for him. (1) H Carlos's company offers a 35% matching contribution, how much would the company contribute to Carlos's 401K by the time he retires? (Express your answer rounded corectly to the nearest cent) (2) f Carlos's company offers a 35% matching contribution, use Excel's FV function to determine how much his Investment will be worth when he retires. (Express your answer rounded correctly to the nearest cent) 3 How much will Carlos have deposited into the account by the time he retires? (Express your answer rounded correctly to the nearest cent)

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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1. Phil Nelson wants to retire when he is 65 years old. Phil is now 45. He believes he will need $430,000 to retire comfortably. To date, Phil has set aside no retirement money. Assume Phil gets 6% interest compounded semiannually. How much must Phil invest today to meet his $430,000 goal?
Nikul
Suppose that Thomas Lee is enrolled in a defined contribution plan in which the employer contributes $8,000 each year. Thomas is earning $80,000 this year and his tax rate is 30 percent (which is not expected to change). Assume that the before- tax rate of return is 8 percent. (a) What is the additional amount of funds that Thomas will have when he reaches retirement in 10 years as a result of this year's service? (b) Suppose that Thomas's employer is planning to reduce half of their contribution to the defined contribution plan. Assume that Thomas would like to keep his retirement funds the same as they would have been with the defined contribution plan. If Thomas's only opportunity to save for retirement is in a nonqualified savings plan (no tax benefits), how much would Thomas need to receive in additional salary (which he would then save) to achieve his objective?
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John is planning to take a loan for a major renovation project for his home. He can afford only 10% of his annual gross salary for the payment of the loan. John makes $80,000 annually. The bank offered him a loan at 8% annual interest rate for 5 years to be paid monthly. Calculate the amount of the loan he should ask for: Group of answer choices $9282 ($44, 386.59) ($36, 988.83) $49,999
1. Jose Garcia's life long dream is to own a fishing boat to use in his retirement. Jose has recently come into an in heritance of $400,000. He estimates that the boat he wants will cost $300,000 when he retires in 5 years. How much of his in heritance must he invest at an annual rate of 8% compounded annually) to buy the boat at retirement? 2. Refer to the data in BE6.7. Assuming quarterly compounding of amounts invested at 8%, how much of Jose Garcia's in heritance must be invested to have enough at retirement to buy the boat?
Munabhai
You analysis was very helpful to Bozena. She has decided to participate in her company's 401(k) plan. She agrees with your analysis (question 4 in the chapter 6 assignment) and your estimate showing $2,133,202 in her retirement account upon retirement. She asks you if she expects to be in the 10% tax bracket upon retirement, and she wishes to fund a retirement that lasts for 25 years, how much after tax money will she have to spend monthly? She conservatively assumes she will earn 5% on her investments during retirement and withdrawals are made at the end of every month. Enter your answer to the nearest dollar without the dollar sign.
Amy Parker, a 22-year-old and newly hired marine biologist, has opened a 401(k) retirement plan with her employer. Amy's contribution, plus that of her employer, amounts to $2,400 per year starting at age 23. Amy expects this amount to increase by 4% each year until she retires at the age of 57 (there will be 35 EOY payments). What is the compounded future value of Amy's 401(k) plan, in millions of $, if it earns an annual interest rate of 7% per year? (a) The compounded future value of Amy's 401(k) plan is $ million. (Round to three decimal places.) (b) What will be the compounded future value if the plan earns an annual interest rate of 4% per year (instead of 7% per year)? $ million. (Round to three decimal places.)
Lastly, Hector wants to invest in a certificate of deposit (CD) to purchase a boat that costs $28,500 when he retires. Leaf Investments offers a CD with 13% compounded semiannually. How much would Hector have to put in the CD today to gain $28,500 in 30 years?
You just graduated and started your new job. Your starting salary is $50,000/year. Your employer's 401(k) plan states that your employer will contribute 3% of your salary to your 401(k) regardless of whether you make any contributions or not. They will also match your contributions, $1-for $1, up to 4% of your salary. Please answer the following questions: Assume that this annual total contribution is made for 35 years and your 401(k) earns an average annual return of 8%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or your answer will be marked as "incorrect". Also, do not add $ or commas in answer.
Jim, aged 62, was retrenched and has been unemployed for ten months, but is still looking for work. He has $620,000 in super and, based on advice received, decides to purchase a 4 - year annuity of $24,000 p.a. payable monthly and indexed at 3% p.a. He can obtain this at a yield of 5.1% from a commercial provider. How much does Jim's annuity cost to purchase?

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