### Retirement Annuity Decision-MakingAn ordinary annuity that earns 7.3% compounded monthly has a current balance of $600,000. The owner of the account is about to retire and must decide how much to withdraw from the account each month. Find the number of withdrawals under each of the following options:- **(A) $5000 monthly**- **(B) $4000 monthly**- **(C) $3000 monthly**#### Question:**(A)** Select the correct choice below, and, if necessary, fill in the answer box to complete your choice.- **O A.** The total number of withdrawals of $5000 will be [ ] - **O B.** The withdrawals of $5000 continue forever.

We will apply the required formula for all 3 monthly payments and will calculate the number of…

Answered: ordinary annuity that earns 7.3%…

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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You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,900 payments and has an APR of 6 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 6 percent, also good for 7 years. How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
A student wants to save for her retirement. At the end of every year, she deposits 475 in a brokerage account with an expected annual return of 4.3%. How much money will she have in the account in 30 years? Enter your answer as a number with 2 places of precision (i.e. 1.23). Do not include dollar signs or commas.
Mr. Gordon plans to invest $400 at the end of each month in an account that pays 6%, compounded monthly. After how many months will the account be worth $30,000? (a) State whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer UP to the nearest month.)
You are planning to make monthly deposits of $340 into a retirement account that pays 9 percent annual interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value
An insurance settlement of $3 million must replace Trixie Eden's income for the next 30 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 8.1%, compounded monthly? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. ordinary annuityannuity due (b) Solve the problem. (Round your answer to the nearest cent.) $
Suppose you want to have $400,000 for retirement in 10 years. Your account earns 9% interest. Feel free to use the Online Basic Financial Calculator a) How much would you need to deposit in the account each month? S b) How much interest will you earn? S
Suppose you want to have $600, 000 for retirement in 15 years. Your account earns 9% interest. Feel free to use the Online Basic Financial Calculator a) How much would you need to deposit in the account each month? $ b) How much interest will you earn? $
At the age of 30, to save for retirement, you decide to deposit $70 at the end of each month in an IRA that pays 4% compounded monthly. a. Use the following formula to determine how much you will have in the IRA when you retire at age 65. P[(1+r)²-1] A = A: or (7) b. Find the interest. ID a. You will have approximately $ in the IRA when you retire. (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The interest is approximately $ (Use the answer from part a to find this answer. Round to the nearest dollar as needed.)
In this exercise, we consider the effects of starting early or late to save for retirement. Assume that the account considered has an APR of 7.2% compounded monthly. Against expert advice, you begin your retirement program at age 40. You plan to retire at age 60. What monthly contributions do you need to make to reach a nest egg of $137,799.63 at retirement? (round to your nearest cent)
If you start making $60 monthly contributions today and continue them for five years, what's their future value if the compounding rate is 10.25 percent APR? What is the present value of this annuity? Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
Label all final answers with the correct units, if applicable. Unless otherwise stated, use 4 decimal places for intermediate computations of interest rates (if needed) then round off final answers to two decimal places. For monetary amounts, use 2 decimal places even for intermediate computations. 3. Aika wishes to set aside a total of P60,000 as savings for the year 2022. She plans to deposit her savings at a bank that offers 3% annual interest rate, compounded monthly. She is deciding how to spread out these deposits during the year. For options A and B given below, determine the better option by finding the withdrawable balance by January 1, 2023. A. P30,000 deposits on June 1 and September 1, 2022 B. P20,000 deposits on June 1, August 1, and October 1, 2022 3

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