Old age comes to everyone. So does poor health, sickness and unemployment. Financial planning is crucial while young. On this note, Raeez started his retirement fund 3 years ago during which he made a monthly contribution of P1500 to SUNLIFE of Canada (Phils.) without fail. Apart from the life insurance and medical insurance, SUNLIFE offered an interest rate of 0.5% per month for the first 2 years and 1% per month thereafter. Today, Raeez's income has improved and so he thought of setting aside a monthly savings of P3000 for the next 5 years and P5000 per month for another 2 years thereafter. Then, he plans to retire. SUNLIFE likewise offered an attractive return of 2% per month after the 5th year of continuous savings. Assuming that Raeez was diligent in his monthly payments, what is the future worth of his savings by the time of his retirement?

Old age comes to everyone. So does poor health, sickness and unemployment. Financial planning is crucial while young. On this note, Raeez started his retirement fund 3 years ago during which he made a monthly contribution of P1500 to SUNLIFE of Canada (Phils.) without fail. Apart from the life insurance and medical insurance, SUNLIFE offered an interest rate of 0.5% per month for the first 2 years and 1% per month thereafter. Today, Raeez's income has improved and so he thought of setting aside a monthly savings of P3000 for the next 5 years and P5000 per month for another 2 years thereafter. Then, he plans to retire. SUNLIFE likewise offered an attractive return of 2% per month after the 5th year of continuous savings. Assuming that Raeez was diligent in his monthly payments, what is the future worth of his savings by the time of his retirement?

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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Eugene began to save for his retirement at age 35, and for 15 years he put $ 325 per month into an ordinary annuity at an annual interest rate of 8% compounded monthly. After the 15 years, Eugene was unable to make the monthly contribution of $ 325, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 15 years until he was ready to retire. How much money did he have for retirement? If Eugene had waited until he was 44 years old to start saving for retirement and then decided to put money into an ordinary annuity for 21 years earning 8% interest compounded monthly, what monthly payment would he have to make to accumulate the same amount for retirement as you found in the first part of the question?
Mr. Arman has decided to start saving for his retirement. Beginning on his twenty-sixth birthday, Arman plans to deposit Tk. 12,000 each birthday into a saving account earning 10% compound annual interest rate. He will continue this saving program for a total of 10 years andthen stop payments. But his savings will continue to compound at 12% for 30 more years, until he retires at the age of 65. Mr. Jamal also plans to deposit Tk. 12,000 a year in a saving account on each birthday at 12%, and will do so for a total of 35 years. However, Jamal will not begin his contributions until his thirty-first birthday. How much will Mr. Arman’s and Mr. Jamal’s savings programs be worth at the retirement age of 65? Who will be better off financially at retirement, and by how much? (Assume annual compounding for each case).
Eugene began to save for his retirement at age 30, and for 11 years he put $ 275 per month into an ordinary annuity at an annual interest rate of 7% compounded monthly. After the 11 years, Eugene was unable to make the monthly contribution of $ 275, so he moved the money from the annuity into another account that earned 11% interest compounded monthly. He left the money in this account for 24 years until he was ready to retire. How much money did he have for retirement?
John won a lottery. After taxes, he was able to take home his winnings worth $510000. He decides to deposit 20% of this in a separate savings account for retirement. If the savings account has a nominal interest rate of 7%, compounded monthly, how much will be in the account if he retires in 35 years?
Slick Sam has a special relationship with his banker. The nature of the relationship is as follows: • The bank owes Sam $100 per year forever. The 1st payment is due in 1 year. • The bank will borrow or lend money to Sam at a constant effective rate of i per year. Today, Sam calculated the present value of the payments that are due to him as X. Sam can receive his first 16 payments at the end of year 16 in a lump sum. If he does that, then the total value of the lump sum and future payments at the end of the sixteenth year is X + 2,000. Calculate X. A B с D E 3,330 3,350 3,400 3,450 3,500
Your great-uncle Claude is 82 years old. Over the years, he has accumulated savings of $180,000. He estimates that he will live another 18 years at the most and wants to spend his savings by then. (If he lives longer than that, he figures you will be happy to take care of him.) Uncle Claude places his $180,000 into an account earning 9 percent annually and sets it up in such a way that he will be making 18 equal annual withdrawals—the first one occurring one year from now—such that his account balance will be zero at the end of 18 years. How much will he be able to withdraw each year?
The worker aged 45 wishes to accumulate a fund for retirement by depositing 100EUR at the beginning of each month for 20 years. Starting at age 65 the worker plans to make monthly withdrawal at the beginning of each month for next 15 years. Assuming that each payments are certain to be made, find the amount of each withdrawal if the effective rate of interest is 5% during the first 10 years but only 3% thereafter. Also, solve this problem assuming that he will spend 4000EUR being exactly 65.
Your uncle Mohammed is celebrating his 33th birthday today and wants to start saving for his retirement at the age of 63. He wants to be able to withdraw AED 100,000 from his saving account on each birthday for 20 years following his retirement. The first withdraw will be on his 64th birthday. Your uncle intends to invest his money in a local bank in Abu Dhabi that offers 7% interest rate per year. He wants to make equal payments on each birthday into the account established in the local bank for his retirement fund. If your uncle starts making these deposits on his 33th birthday and continues to make deposits until he is 63, what amount must he deposit annually to be able to make the desired withdrawals at retirement?
Mr. Crabapple wants to donate money now for an account that will allow a favored charity to make $17,000 withdrawals at the end of each of years 19 to 44. How much should he contribute today if investment managers Dogwood Associates expect to earn returns averaging 4.3% per year on the charity's foundation account? (This is a 26-year deferred annuity, with $17,000 to be paid out at the end of each of years 19 to 44.) A. $128,584.54 B. $115,644.17 C $263,040.12 D. $123,283.36 E. $156,230.80
I need help working this problem out. Figuring out what table to use, whether to use: compound value, present value, amount of annuity, present value of annuity, sinking fund value? Please explain in detail each step. Nina deposits $3400 into a savings account earning simple interest at 6.3% annually. She intends to leave the money in the bank for three years. How much money, including both principal and interest, can she withdraw at the end of this time?
On January 1, 1980, your favorite uncle John turned 43 and started saving for his retirement. He invested $18,894.75 each year on January 1 until he turned 62 on 1/1/1999 (20 total deposits). Over the 20 years, he managed to earn an effective annual rate of return of 9.50%, and he assumed he could continue to earn that rate of return until he turned 90. Looking at his account balance, he calculated that he could immediately withdraw $74,050.56 to cover living expenses for 1999. And, going forward, he could withdraw that same amount on January 1 of each year, but adjusted for a 3% inflation. That is, in 2000, he could withdraw $74,050.56 x 1.03 $76,272.08; in 2001, $74,050.56 x 1.032 $78,560.24; etc. He planned on a total of 28 withdrawals, with the last one of $164.487.70 on 1/1/2026 when he turned 89. At that point, the account balance would be zero. 501 On 1/1/2023, right after making his withdrawal for 2023, your uncle decided to become a Tibetan monk. He left you the balance of his…
You contribute $1,500 annually to a retirement account for seven years and stop making payments at the age of 45. Your twin brother (or sister . . . whichever applies) opens an account at age 45 and contributes $1,500 a year until retirement at age 65 (20 years). You both earn 9 percent on your investments. How much can each of you withdraw for 20 years (that is, ages 66 through 85) from the retirement accounts? Use Appendix A, Appendix C, and Appendix D to answer the question. Round your answers to the nearest dollar. You can withdraw $ Your twin can withdraw $ bongo O

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