Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 70.00. During these yearsof part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one yearafter the day he turns 70.0 when he fully retires, he will begin to make annual withdrawals of $157,978.00 from hisretirement account until he turns 93.00. After this final withdrawal, he wants $1.56 million remaining in his account. Hehe will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, whatmust the contributions be? Assume a 9.00% interest rate.SubmitAnswer format: Currency: Round to: 2 decimal places.

A retirement goal is a financial target an individual sets to achieve a comfortable and financially…

Answered: Derek plans to retire on his 65th…

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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To prepare for his retirement in 13 years, Tekla deposited 10,000 in an account paying 9%. Nine years after, he deposited another 10,000. How much will be available at his retirement? *
You begin making contributions to a new retirement account on your thirtieth birthday. You make a contribution of $4000 at the beginning of each year through your sixty-fourth birthday. Starting at age sixty-five and continuing through your eightieth birthday, you made a level withdrawal on your birthday. Find the amount of these withdrawals if they completely exhaust the balance in your account and the annual effective rate is 6% until you are sixty-five and 5% thereafter.
Mr. Reyes wants to retire 15 years from now. Aside from the retirement benefits from his company and the social security benefits that he will get, Mr. Reyes wants to have an additional 2 million pesos when he retires. To achieve this goal, he will make equal annual deposit at the end of each year for the next 15 years in an account that earns 5% interest per annum. How much should Mr. Reyes deposit each year?
Frank buys a house at age 48 for $600,000 by making a $170,000 down payment and securing a 30-year mortgage with 3.54%/year interest compounded monthly. He sells his house at age 65 when he retires for $840,000 and adds his equity in his retirement account. If Frank wants to receive $8,000 every month during his retirement for 28 year, then how much he needs to deposit every month into his retirement account starting at age 27 that pays interest at the rate of 2.07%/year compounded monthly?
Ty received a separation payment of $25,000 from his former employer when he was thirty-five years old. He invested that sum of money at 5.5% compounded semi-annually. When he was sixty-five, he converted the balance into an ordinary annuity paying $6000 every three months with interest at 6% compounded quarterly. For how long will the annuity continue to pay him? The annuity will continue to pay him for quarterly periods. (Round up to the nearest whole number.)
When she turned 30, Arwen started depositing $400 per month in a retirement account that earns 2.4% interest compounded monthly. If she plans to retire when the account contains $200,000, how old will she be when she retires.
Sam is planning to retire in the next few years and wondering how much his annual CPP would be if he delayed claiming it a few years. His CPP statement indicates he would qualify for CPP of $724 per month at age 65. Assume he stops contributing to CPP at age 65. What amount of annual CPP will he qualify for ANNUALLY if he delays retiring until age 68? Input the answer to the nearest dollar. Answer:
At age 35, Ronald earns his MBA and accepts a position as a vice president of an asphalt company. Assume that he will retire at the age of 65, having received an annual salary of $105,000, and that the interest rate is 8%, compounded continuously. a) What is the accumulated present value of his position? b) What is the accumulated future value of his position?
To prepare for an early retirement, a self-employed businessman makes deposits of $6200 at the begin of each half-year for 6 years, starting on his 40 birthday. When he is 53, he wishes to make 30 equal day withdrawals. What is the size of each withdrawal if interest is 7.21% compounded daily?
William North has just inherited $895,000 which he would like to use as part of his retirement nest egg. He invested the funds at a 6.28 percent annual rate compounded annually. William will reach age sixty in 10 years and will retire early. Now he would like to know how much he could withdraw from the fund in equal installments at the end of each year from the year he reaches age 60 until he reaches age 70¹2, the year he must start withdrawing funds from his individual retirement account (IRA). William assumes the funds will continue to earn at a 6.28 percent annual rate. In other words, William would like to know the annual year-end payment from an eleven-year annuity (from age 60 to the year he will be 70¹2), earning 6.28 percent annually. Round the answer to two decimal places.
Since he was 24 years old, Ben has been depositing $225 at the end of each month into a tax-free retirement account earning interest at the rate of 3.5%/year compounded monthly. Larry, who is the same age as Ben, decided to open a tax-free retirement account 5 years after Ben opened his. If Larry's account earns interest at the same rate as Ben's, determine how much Larry should deposit each month into his account so that both men will have the same amount of money in their accounts at age 65. (Round your answer to the nearest cent.)

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