Monica has decided that she wants to build enough retirement wealth, if invested at 8percent 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? Firstcompute how much money she will need at retirement, then compute the monthlycontribution to reach that goal.

The concept of time value of money will be used here. As per the concept of time value of money the…

Answered: Monica has decided that she wants to…

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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Joanne is retiring this year. When she started saving 40 years ago, she planned to invest $1,000 per year in an account that promised her 5% annual rate of return. She diligently saved $1,000 every year, except for a five-year period that started fifteen years ago and ended ten years ago. How much does Joanne have in her account today?
Adele is planning for retirement. She would like to have $75,000 in her hand at the beginning of her first year of retirement at age 65 to live on for the year. She estimates that the amount will have to grow by 6% every year to keep up with inflation. What APR (nominal rate per year) should her retirement account earn if it is compounded continuously? She plans to deposit $21,000 on her 40th birthday and plans to keep increasing the deposits by 6% every year and till her 64th birthday. She estimates her life expectancy to be 85, meaning she would like to have the last retirement payment on her 85th birthday.
Sarah Wiggum would like to make a single investment and have $1.7 million at the time of her retirement in 40 years. She has found a mutual fund that will earn 6 percent annually. How much will Sarah have to invest today? If Sarah invests that amount and could earn a 13 percent annual return, how soon could she retire, assuming she is still going to retire when she has $1.7 million? To have $1.7 million at retirement, the amount Sarah must invest today is $_________(Round to the nearest cent.) see attachment for PVIF table
Ms. Lee is thinking about her retirement fund and she still have another 15 years to reach her retirement time. She deposits RM4,800 each year in the investment that give 6% until her retirement day. How much she will have accumulate?
After retiring, Amina wants to be able to withdraw $30,500.00 every year from her account for 25 years. Her account earns 9% interest compounded annually.How much does Amina need in her account when she retires? Amina needs$________ in her account when she retires. How much total money will Amina pull out of her account? In total, Amina will pull out $________ from her account. How much of that money is interest? The amount of money that is interest is$________ .
Tina is exactly 25 years old and has already accumulated $18,000 of retirement savings. Her goal is to retire at age 65 with total savings that will have the purchasing power of $425,000 in current dollars. Assuming an inflation rate of 16% per year, how much does Tina need to save at the end of every month from age 25 to 65 to reach her goal if her savings earn 6% compounded quarterly? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Tina needs to save 24
Tariq Ahmed is 25 years old and is saving for her retirement. He is planning on making 40 contributions to her retirement account at the beginning of each of the next 40 years. The first contribution will be made today and the final contribution will be made 40 years from today. The retirement account will earn a return of 12 percent a year. If each contribution he makes is $5,000, how much will be in the retirement account 40 years from now?
bed What's the interest rate of a 5-year, annual $5,400 annuity with present value of $22,000? (Use a time value of money calculator or a spreadsheet. Round your answer to 2 decimal places.) Annuity interest rate %
Heather is planning to retire in 7 years. She will then need an income of $1444 at the beginning of every month for the subsequent 25 years. She is going to make one investment today to provide all of the money she will eventually collect. Her investments will earn 7.33% compounded monthly. How much should she invest today?
A woman is planning for retirement in 30 years and decides she can deposit $6,000 each year on December 31 into a retirement savings plan that she expects will pay 6% interest. In 20 years she also expects to receive a small inheritance of $12,000 that she can also put into her retirement fund. The woman anticipates that her retirement fund will need to last 20 years; she estimates that she will need $60,000 at the end of each year in retirement to cover her living expenses. Her plan is flawed. How much extra does she need to save every year (rounded to dollars and cents) to achieve her goals? (Do not round interim calculations)
Please help me
Bella is 23 years old and wants to invest money for her retirement. She wants to have $2,000,000 saved up when she retires at age 65. A) If she can earn 10% per year in an equity mutual fund, calculate the amount of money she would have to invest in equal annual amounts to achieve her retirement goal. B) Alteratively, how much would she have to invest in equal monthly amounts starting at the end of the current year or monthly respectively.

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