Currently, you have $10,000 in your retirement account. You deposit $20,000 at the end of each year in the same retirement portfolio for 40 years. You intend to retire 40 years from today. You intend to start receiving monthly payments over the next 30 years after you retire. The first payment would be received at the end of the first month

Currently, you have $10,000 in your retirement account. You deposit $20,000 at the end of each year in the same retirement portfolio for 40 years. You intend to retire 40 years from today. You intend to start receiving monthly payments over the next 30 years after you retire. The first payment would be received at the end of the first month

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 are working for a finance firm and a client comes to you and wants to know how much money they should put in an annuity (which earns 2.885% interest compounded quarterly) at the end of each three months for the next 36 years. Their goal is that when they retire at the end of 36 years, they would like the quarterly withdrawals from the annuity to total $68,000 per year and that the annuity is to last for the next 23 years. You are to determine the amount which your client needs to deposit into the annuity at the end of each three months for the next 36 years so that they can meet their retirement goal. Do the following: Show all your work that you used to answer this problem. Label the steps and important values as you solve the problem. Note that when you use the TVM Solver, show the all variables and the values you entered (into the variables) and solved for. Find the total amount of interest client will earn (from the time they start contributing to the account to when they…
The worker aged 45 wishes to accumulate a fund for retirement by depositing 100EUR at the beginning of each month for 20 years. Starting at age 65 the worker plans to make monthly withdrawal at the beginning of each month for next 15 years. Assuming that each payments are certain to be made, find the amount of each withdrawal if the effective rate of interest is 5% during the first 10 years but only 3% thereafter. Also, solve this problem assuming that he will spend 4000EUR being exactly 65.
when you retire 40 years from now you plan to make 10 annual withdrawals from your savings accounts at the end of each year, until the 50th year. You will need 131,480 each year for 2 years, then 143,827 each year for 3 years and 166,728 each year for 5 years. You want to start saving for retirement now and plan to make annual payments for 20 years into an account that yields 8 percent compounded annually. After these deposits you plan to leave the money in the savings account until retirement earning the same interest. What should these annual payments be in order to satisfy your retirement needs? Assume end of year payments.
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