Sery//ua/69158/45467554/aHR0cHM6Ly9mMS5hcHAUZWRtZW50dW0uY29tL2xlYXJuZXItdWk...Unit Activity: Mathematical Models and Investments15pxSpace used (includes formatting): 0/15000The raPart CSince she was 25, Jenna has been saving $5,000 each year in her IRA. Her IRA earns a 6% return onaverage. If that continues, she will have over $870,000 in savings by age 65, enough for a retirementincome of around $65,000 a year. Jenna figures that $60,000 is more than enough, so she wants toretire early at age 62. She calculates that her savings will only be $15,000 less, since she saves just$5,000 a year. Give a reason why Jenna's calculation is incorrect and explain your answer?B I U X² X₂三三三三三三VUnit 2 +<Part DJohn is 50 and has paid off the mortgage on a large house. He has focused on repairing and paying offthe house instead of investing in IRAS and 401(k) plans. He has contributed to Social Security for almost30 years now. John proposes to make up by starting an IRA and contributing $5,000 per year to the IRAEvaluate John's plan and offer at least one possible improvement.Apr 1710 of 111:579> Part CSuppose the government eliminated all capital gains taxes on bonds but not on stocks. What would thischange do to the price of stocks and why? What might companies do in response to this change?BIUX² X₂V8VBSpace used (includes formatting): 0/ 15000Part DJohn is considering taking out a loan to purchase stocks, using his house as collateral on the loan. Hebelieves his stock returns will be greater than the interest payments on his loan. Evaluate the risks andrewards of his plan.X² X₂I15pxUVEV AM15pxAVVEVEApr 171:58

Annuity is a series of equal payments at equal interval for a specified period. With periodic…

ents V A V 10 of 11 Part C Since she was 25, Jenna has been saving $5,000 each year in her IRA. Her IRA earns a 6% return on average. If that continues, she will have over $870,000 in savings by age 65, enough for a retirement income of around $65,000 a year. Jenna figures that $60,000 is more than enough, so she wants to retire early at age 62. She calculates that her savings will only be $15,000 less, since she saves just $5,000 a year. Give a reason why Jenna's calculation is incorrect and explain your answer? BIUX² X₂ 15px

ents V A V 10 of 11 Part C Since she was 25, Jenna has been saving $5,000 each year in her IRA. Her IRA earns a 6% return on average. If that continues, she will have over $870,000 in savings by age 65, enough for a retirement income of around $65,000 a year. Jenna figures that $60,000 is more than enough, so she wants to retire early at age 62. She calculates that her savings will only be $15,000 less, since she saves just $5,000 a year. Give a reason why Jenna's calculation is incorrect and explain your answer? BIUX² X₂ 15px

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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Manya and Sarah are both starting out in their careers. They choose two different paths to saving in their 401k accounts for their retirements. Manya is 23 years old and decides to start depositing $400 monthly in her 401k which will earn 9.5% APR. Manya will retire at the age of 70. a) How many years will Manya be saving money in her 401k? years b) How much will be in Manya's 401k when she retires? c) How much will Manya have deposited herself over her years of working from her salary? d) How much will Manya have earned in interest over her years of working? Sarah waits to begin depositing money into a 401k (for various reasons that seemed important at the time...) until she was 40 years old. She decides to deposit twice as much as Manya per month hoping to catch up. Assume that Sarah gets the same 9.5% APR and will retire at the same age of 70. e) How many years will Sarah be saving money in her 401k. years f) How much will Sarah be depositing in her account each month? g) How much…
Question 20 Ashley turned 30 today, and she is planning to save $3,000 per year for retirement, with the fest deposit to be made one year from today. She will invest in a mutual fund, which she expects to provide a return of 1.30% per year throughout her lifetime. She plans to retire 35 years from today, when she turns 65, and she expects to live for 30 years after retirement, to age 95. Under these assumptions, how much can she spend in each year after she retires? Her first withdrawal will be made at the end of her first retirement year, and she plans on leaving no money to her hers Your answer should be between 28,000.00 and 95,225.00, rounded to 2 decimal places, with no special characters.
Ishan plans to retire at age 40 with a decent lifestyle. He assumes that he can safely earn a real return of 4% annually on his money and that he would need $4000 a month to last until he turned 90. How much money would he need to have accumulated at age 40 (to the nearest thousand) if he were going to retire and no longer earn any money? $1 500 000 $1 050 000 $2 980 000 $ 2 400 000
Gina is 25 years old and wants to save $800,000 for retirement in 30 years. Assume she invests in a savings account that earns at least the current rate of inflation (6.5%). Determine how much money Gina must save based on the number of years that she waits to start saving to reach her retirement goal. Years of Waiting to Save Principal Required 0 10 20 30 $800,000
Retirement planning 10. Your sister turned 35 today, and she is planning to save $5,000 per year for retirement, with the first deposit made one year from today and the last deposit made on her 65th birthday. She currently has no retirement savings. She will invest in a mutual fund, which she expects to provide a return of 10% per year throughout her lifetime. She plans to retire 30 years from today when she turns 65. She will make a total of 20 annual withdrawals with her first withdrawal made on her 66th birthday, and the last withdrawal made when she is 85. After the last withdrawal there will be $500,000 left in the account. Under these assumptions, how much can she spend in each year after she retires? a. $71,880.34 b. $79,888.38 C. $83,882.80 d. $87,877.22 e. $98,125.22
20
4. Cecilia Thomas is 25 years old and is planning to invest $ 3,000 annually in an IRA that pays 9.75% compounded annual interest, until she retires at 65 years of age. How much money will Cecilia have for her retirement?
39. Problem 5.39 (Required Annuity Payments) 19 Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 4%. He currently has $235,000 seved, and he expects to earn 916 annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar $
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