f you saved an average of $2,910 each year from your income tax return, $1,060 for not buying vendor coffee, and $2, 520 (saving $210 each paycheck), how much would you have in your retirement account if you were able to invest this annual savings at the end of each year for 30 years at 5% interest compounded annually?

f you saved an average of $2,910 each year from your income tax return, $1,060 for not buying vendor coffee, and $2, 520 (saving $210 each paycheck), how much would you have in your retirement account if you were able to invest this annual savings at the end of each year for 30 years at 5% interest compounded annually?

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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Similar questions

Suppose your parents have just retired and have $1 million in a retirement account. For how many years can they withdraw $5,000 at the beginning of each month for expenses, assuming that the account will continue to earn a 5 percent annual return until it is exhausted?
Suppose, again, that you want to retire at age 65 and to cover 25 years of regular, annual, $60,000 expenses, beginning on your 66th birthday, given 7% rates of return on your savings. a) What would be the present value of this amount on your 24th birthday? B) If you wanted to put an equal amount into your retirement account each year, beginning on your 25th birthday, and ending with the final payment on your 65th birthday, how much would you need to set aside each year?
You have just retired with savings of $4 million. If you expect to live for 57 years and to earn 13% a year on your savings, how much can you afford to spend each year (in $ dollars)? $_______. (Assume that you spend the money at the start of each year.)
You are preparing for your retirement and have decided to begin saving early. Based on your research, you've determined that you will require $3,000 per month to cover your living expenses during retirement. a. How much money do you need when you retire if you place all of it in a compound interest account that earns 7% compounded monthly, and is living off the interest only? (What is the required retirement savings amount that can generate your monthly living expenses as interest income?)
You have $1,000 today in your savings account. How long must you wait for your savings to be worth $2,000 if you are earning 0.25 percent interest, compounded annually? years (XXX.XX years) You want to have $40,000 for a down payment on a house 4 years from now. If you can earn 3.95 percent, compounded annually on your savings, how much do you need to deposit today to reach your goal? ($xxxx.xx)
You choose to invest your $3,410 income tax refund check (rather than spend it!) in an account earning 5% compounded annually. How much will the account be worth in 30 years? (Use the Table provided.) (Round your answer to the nearest cent.)
How much would you still owe at the end of the first year, after you have made the first payment?
2.
You are 30 years old today. You want to retire at the age of 55. You expect to live until age 90. You would like to have a monthly income of $9,000 per month in retirement. How much do you have to save per month during your working years in order to achieve your retirement goal? Assume end of period payments. Assume an annual interest rate of 3.5% in retirement and 5% during your working life. How much do you have to save per month during your working years in order to achieve your retirement goal? $ (Round to the nearest cent.)
How much do you need to save each year for 30 years in order to have $775,000, assuming you are investing the money in an account that earns 8%? How much of the $775,000 comes from contributions (your out of pocket costs)?
f you saved your tax refund $14,089.39, quit buying vendor coffee for one year $12,522.23, and decided to contribute $5,040 (you saved $420 per month) in your Roth IRA, how much would you have for retirement if you could invest these savings at 7% compounded annually for 30 years for this one year of savings? (Use the Table 12.1 provided.) Note: Round your answer to two decimal places. Amount saved for Retirement
Please answer using life-cycle problem. Suppose the interest rate is 5%, the income tax rate 35%, the tax rate on investment income is 20%, and the investment horizon 40 years. (a) What is the final payoff after tax if $100 pre-tax income is invested in a regular savings account? (b) What is the final payoff after tax if $100 pre-tax income is invested in a retirement account? (c) What is the final payoff after tax if $100 pre-tax income is invested in a Roth account?

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