It's All About the Benjamins!3 You and your co-worker Benjamin have both just turned 22 and are having dinner to celebrate. You begin talking about4 saving for retirement. Your company offers an invesment portfolio that has historically earned 11% interest, compounded5 semi-annually. You both decide to invest in this portfolio, but you have different investment strategies.67 Benjamin plans to start immediately. He has decided to invest a certain amount of money annually for exactly 8 years. At thatpoint, Benjamin will stop investing in the account and will let the money grow until he turns 65.8910 You decide you'd rather wait until you are in a better place financially, so you are not going to begin investing until age 30.11 You will invest the same annual amount as Benjamin and plan to invest that amount every year until you reach age 65.1213 You and Benjamin make a friendly bet to see who will have more money in their retirement account at age 65!1415 Part I16Choose an amount between$1,000 and $10,000 for p, theannual amount of moneyinvested by both you andBenjamin. Enter the chosenamount in the green box.22231819 Part II20 How much does Benjamin have in his account after 1 year? Use the compound interest formula and show all work.21p201H

Future value annuity due Annuity due is the case when payment starts immediately. With interest rate…

Answered: ou and your co-worker Benjamin have…

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 are trying to decide how much to save for retirement. Assume you plan to save $6,000 per year with the first investment made one year from now. You think you can earn 6% per year on your investments and you plan to retire in 43 years, immediately after making your last $6,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $6,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 18 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 18th withdrawal (assume your savings will continue to earn 6% in retirement)? d. If, instead, you decide to withdraw $100,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take…
You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year with the first investment made one year from now. You think you can earn 6.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,500 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 16 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 16th withdrawal (assume your savings will continue to earn 6.0% in retirement)? d. If, instead, you decide to withdraw $191,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
Your client is 45 years old, and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $6,000 per year, and you advise her to invest it in securities which you expect to provide an average annual return of 11 percent. If she follows your advice, how much money would she have at age 65? a. $133,200.00 b. $967,477.38 c. $48,373.87 d. $427,590.86 e. $385,216.99
You want to have $2million when you retire. You think you can earn 11% return on your retirement account. You are currently 20 yrs old and are planning to retire at age 60. Q1. How much do you need to invest today? Solve for PV? In the meantime, an insurance company A comes to you and say that they will pay you $2million at age 60 on your fund if you invest $350,000 now with their company. Q2. Would you rather purchase this retirement-insurance or invest yourself? Show work.
You just had your 30th birthday and you are planning for your retirement at age 66. You currently have $20,000 in your investment portfolio, and you estimate that you will need at least $1.5 million in order to retire comfortably when you turn 66. What rate of return must be earned on your investment portfolio (assuming that you do not add any more money into the account) for your retirement plan to work? Show me all the calculation process
Today, you turn 21. Your birthday wish is that you will be a millionaire by your 40th birthday. In an attempt to reach this goal, you decide to save $25 a day, every day until you turn 40. You open an investment account and deposit your first $25 today. What rate of return must you earn to achieve your goal? 15.07% 15.13% 15.17% 15.20% 15.24
Your client, Tom, has come to you inquiring about retirement. He wants to know approximately how much (in future dollars) he will need to have saved by retirement. You have calculated that he will need about $182,365 a year to maintain his current life style. He expects to retire at age 64 and live to around 90, and his return on investment averages at 9%. Estimated average inflation is 3%. How much does Tom need to have on day 1 of retirement to meet this goal? O $1,987,422 O $2,127,937 O $2,662,389 O $2,552,815
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 10.0% per year on your investments and you plan to retire in 43 years, immediately after making your last $5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $5,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 20 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 20th withdrawal (assume your savings will continue to earn 10.0% in retirement)? d. If, instead, you decide to withdraw $300,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 29 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 7.0% in retirement)? d. If, instead, you decide to withdraw $70,000 per year in retirement (again with the first withdrawal one year after retiring), how…
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 10.5% per year on your investments and you plan to retire in 36 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 10.5% in retirement)? d. If, instead, you decide to withdraw $270,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
(1) SITUATION There are two brothers; Percy and Liam. They both have the goal to retire at the age of 65 with one million dollars in their respective bank accounts. They have been talking to people familiar with the stock market, who assure them that over long periods of time they will be able to earn an 8% return by investing. ANNUITIES Percy decides that instead of doing a one-time payment, he is going to save a little bit each month. If he begins saving $350 per month at age 25, will he meet his goal? (2) Liam follows his brother and begins to save $350 per month – except he again waits until he is 35. How much less will Liam have than his brother at retirement? .
Your client is 26 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $8,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 10% in the future. A. If she follows your advice, how much money will she have at 65? B. How much will she have at 70?

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