Karen and Dave are planning to retire today. They would like to receive $50,000 per year in today's dollars, at the beginning of each year, for the next 25 years. Karen and Dave expect their investments to earn 8% per year and inflation to be 2% each year. How much must Karen and Dave have today, to meet their goal? $533,739 $576,438 $646,376 $684,399

Karen and Dave are planning to retire today. They would like to receive $50,000 per year in today's dollars, at the beginning of each year, for the next 25 years. Karen and Dave expect their investments to earn 8% per year and inflation to be 2% each year. How much must Karen and Dave have today, to meet their goal? $533,739 $576,438 $646,376 $684,399

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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Happy birthday! You are 30 years old today. You want to retire at age 60. You want to have $2, 900, 000 at retirement. Realistically, you know that the most that you can save from your 31st birthday until your 50th is $6, 250 per year (you only save on your birthdays!). How much do you have to save each year from your 51st to your 60th birthday in order to achieve your retirement goal if you can earn 6.5% on your savings?
Your grandparents would like to establish a trust fund that will pay you and your heirs $185,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.6 percent, how much must your grandparents deposit today? Multiple Choice: $4,743,589.74 $4,282,407.41 $5,138,888.89 $4,496,527.78 $5,873,015.87
Monica has decided that she wants to build enough retirement wealth, if invested at 8 percent per year, to provide her with $3,500 of monthly income for 20 years. To date, she has saved nothing, but she still has 30 years until she retires. How much money does she need to contribute per month to reach her goal? First compute how much money she will need at retirement, then compute the monthly contribution to reach that goal.
Your parents will retire in 22 years. They currently have $220,000 saved, and they think they will need $2,300,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Kate plans to save $100 a month, starting today, for 20 years. Jane plans to save $100 a month for 20 years, starting one month from today. Both Kate and Jane expect to earn an average return of 5.5 percent on their savings. At the end of the 20 years, Kate will have approximately _____ more than Jane.
Your parents will retire in 17 years. They currently have $290,000 saved, and they think they will need $2,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Darnell Johnson wants to know if he can retire in 35 years at age 60, when he plans to do a lot of fishing. Assume the deposit into his retirement account averages $3800 at the end of each year and that the funds earn 6% per year. find amount of annuity and the interest earned.
Marc has nothing saved for retirement. He wants to receive $46,000.00 per year for 5 years during retirement. The first of these payments will be received in 7 years. Marc can earn a return of 9.38 percent per year. How much does Marc need to save each year for 6 years to have exactly enough to meet his retirement goal if he makes his first annual savings contribution in 1 year and all savings contributions are equal? O $21,324.88 (plus or minus 10 dollars) O $25,513.05 (plus or minus 10 dollars) O $23,325.15 (plus or minus 10 dollars) O $20,819.31 (plus or minus 10 dollars) O none of the answers are within 10 dollars of the correct answer
You want to leave a small amount for two of your children, Kira, aged 68 and Fred, aged 63. Kira will retire at 70 (t = 2), as will Fred (t = 7). You want each to have $500,000 per year for the rest of their lives, payable at the beginning of each year. You expect each to live to 95. The annual interest rate is expected to be 9%. How much money would you need to deposit today in an account to fund these kids' retirement?
A couple just got married and they are both 25 years of age. They each plan to retire in 40 years at the age of 65. They want to be able to receive $200,000 at the end of each year for 20 years, upon retirement(so their first retirement payment will be at 41)Currently they have a total of $2,000 in cash savings. How much must they save at the end of each year for the next 40 years so as to have enough money to achieve their current goal? Assume the interest rate is 8% and will remain the same. Also assume that they start saving at the end of the first year.
Imagine you are helping a client, Jill Pole, prepare for retirement Jill would like to withdraw $14,411 from her retirement fund exactly one month after she quits her job. Jill would like all subsequent monthly withdrawals to grow at an effective annual rate of 2.5%. Further, Jill would like to have her funds invested to earn an effective annual return of 7.7%. Jill expects to live for 26 years once she retires and does not plan to leave an inheritance. How much does Jill need to have in her retirement account on the day she retires in order to fund this stream of growing monthly distributions from her retirement account?.
Your grandparents would like to establish a trust fund that will pay you and your heirs $135,000 per year forever with the first payment 12 years from today If the trust fund earns an annual return of 26 percent, how much must your grandparents deposit today?

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