You want to save money for retirement. Your savings pattern is as follows:First 5 years: You save $2200 each yearNext 14 years: In the 6th year, you save $2100 and decrease your savings by $100 in each following year.How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?

Future Value: It is the future worth of the annual cash flows compounded over a period of time. The…

Answered: How much money will you have when you…

Business

Finance

How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

See similar textbooks

Related questions

Q: Suppose you want to have $500,000 for retirement in 25 years. Your account earns 6% interest. How…

A: The future value of an annuity is the future worth of a series of cash flows at a certain rate of…

Q: Assume your goal in life is to retire with one million dollars. How much would you need to save at…

A: To calculate the annual saving amount we will use future value of annuity formula as follows…

Q: You have decided you would like to deposit $5,000 into your account today and not touch it until you…

A: Future value of amount is the value of today money in future based on time and interest and is equal…

Q: what is the value of your retirement plan after the 50 years? (Do not 3 decimal places)

A: The future value can be compared to the projected how much money you will have in the future from…

Q: What annual rate of return would Jia need to earn if she deposits $20,000 per year into an account…

A: Annual rate of return would Jia need to earn if she deposits $20,000 per year into an account…

Q: Calculate how much you will have to save each month between now and then to have $300,000 in your…

A: Calculate the monthly saved amount as follows:

Q: Today is your birthday and you decide to start saving for your retirement. You will retire on your…

A: Solution- Amount to be deposited every year=$700000Interest for 1 year…

Q: I would like to have $50,000 after retirement in 20 years 8 months from now. How much should I…

A: Present Value(PV) is value of a future amount at current point of time. It is done by discounting…

Q: Your mom is thinking of retiring. Her retirement plan will pay her either $200,000 immediately on…

A: Given:

Q: Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to…

A: An annuity is a way of fulfilling our future goals by investing a fixed amount for a fixed interval…

Q: Calculating Annuity Payments You want to be a millionaire when you retire in 40 years. How much do…

A: Retirement period = 40 yearsInterest rate = 10.2%Amount = $1,000,000

Q: What effective interest rate will Frankie have to earn if his investments of $2,000 at the end of…

A: Calculate the effective interest rate using Excel as follows:Formula sheet:Notes:To understand the…

Q: You want to be able to withdraw S30, 000 from your account each year for 30 years after you…

A: First, we need to calculate the present value of the retirement withdrawals. This is the amount of…

Question

You want to save money for retirement. Your savings pattern is as follows:
First 5 years: You save $2200 each year
Next 14 years: In the 6th year, you save $2100 and decrease your savings by $100 in each following year.
How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Typed and correct answer please. I ll rate
You want to be able to withdraw $30,000 from your account each year for 25 years after you retire.You expect to retire in 20 years.If your account earns 5% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
After retirement, you expect to live for 25 years. You would like to have a $95,000 income each year. The annual interest rate is 9 percent per year. Required: Calculate the amount of savings you have in your retirement account to receive this income. A) Assume that the payments start on the day of your retirement. B) Assume that the payments start one year after the retirement.
You are 20 years old and decide to start saving for your retirement. You plan to save $5,500 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 66. Suppose you earn 7% per year on your retirement savings. a. How.much will you have saved for retirement? b. How much will you have saved if you wait until age 36 to start saving (again, with your first deposit at the end of the year)?
You are 20 years old and decide to start saving for your retirement. You plan to save $6,000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 68. Suppose you earn 5% per year on your retirement savings. a. How much will you have saved for retirement? b. How much will you have saved if you wait until age 32 to start saving (again, with your first deposit at the end of the year)? a. How much will you have saved for retirement? The amount that you will have accumulated for retirement is $ (Round to the nearest dollar.) b. How much will you have saved if you wait until age 32 to start saving (again, with your first deposit at the end of the year)? The amount that you will have accumulated for retirement is $ (Round to the nearest dollar.)
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $60,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 6.6% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday?
When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be earning 6% per year. Find PV Annuity: If you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? Find PV Annuity: If the account will be earning 3% per year, and you wish to do that for 20 years starting on the day you retire, what does the balance in your retirement account have to be when you retire?