ou have $300,000.00 saved in a retirement account paying 4% interest compounded monthly and are ready to start your retirement. You have to figure out how much money you can safely take out of your account every month because you don't want to run out of money before you die. How much money can you take out each month if you expect to live another 25 years?

ou have $300,000.00 saved in a retirement account paying 4% interest compounded monthly and are ready to start your retirement. You have to figure out how much money you can safely take out of your account every month because you don't want to run out of money before you die. How much money can you take out each month if you expect to live another 25 years?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

You are saving for retirement. To live comfortably, you decide you will need to save $3,000,000 by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 6%, how much must you set aside each year to make sure that you will have $3,000,000 in the account on your 65th birthday? The amount to deposit each year is $ (Round to the nearest cent.)
You are hoping to buy a house in the future and recently received an inheritance of $16, 000. You intend to use your inheritance as a down payment on your house. a. If you put your inheritance in an account that earns 8 percent interest compounded annually, how many years will it be before your inheritance grows to $33, 000? b. If you let your money grow for 9.5 years at 8 percent, how much will you have? c. How long will it take your money to grow to $33, 000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $33, 000 if you move it into an account that pays 12 percent? d. What does all this tell you about the relationship among interest rates, time, and future sums?
Suppose that you save for retirement by contributing the same amount each month from your 23 rd birthday until your 65th birthday, in a retirement account that pays a steady return of 7.5 percent compounded monthly? Every month you save $100.
Having trouble, please help! You would like to have $1,000,000 when you retire in 35 years. How much should you invest each quarter if you can earn a rate of 7.9% compounded quarterly?a) How much should you deposit each quarter?$b) How much total money will you put into the account?$c) How much total interest will you earn?$
You plan to make annual deposits of $5,000 per year at the beginning of each year into your retirement account. Your goal is to have $800,000 If you expect to get an 8% rate of return, how many years will it take you to reach your goal?
You want to save money for retirement. Your savings pattern is as follows: First 5 years: You save $2200 each year Next 14 years: In the 6th year, you save $2100 and decrease your savings by $100 in each following year. How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?
2. (From section 6.2) You want to be able to withdraw $50,100 from your account each year for 20 years after you retire. You expect to retire in 35 years. If your investment account earns 5.5% interest, how much will you need to deposit into the account at the end of each year until you reach retirement to achieve your retirement goals? (a) The first part is finding how much we need to have in the account by the time we retire. Which formula will you use first? Circle one. Annuity Payout-Annuity (b) What are the following variables that we will need for the formula? PMT = n = t = r = A or Po = (c) Write the formula you will use with the numbers plugged in below. (d) Solve using your calculator or technology and round to two decimal places. Work is not required here. Write the answer here and state which variable you solved for. (e) Using your own words, describe what you found by solving the equation in terms of the word problem given.
Hi, How do I solve for the 2 annuities in this question? Thanks
You just retired to find your retirement savings account has reached $1,000,000. The savings account has a rate of 3.1 % compounded continuously. Your lifestyle requires you to live off $50,000 each year to be comfortable. If at retirement age you are 65 years old, how old will you be when the money runs out?
Suppose your parents have just retired and have $1 million in a retirement account. For how many years can they withdraw $5,000 at the beginning of each month for expenses, assuming that the account will continue to earn a 5 percent annual return until it is exhausted?
Suppose, again, that you want to retire at age 65 and to cover 25 years of regular, annual, $60,000 expenses, beginning on your 66th birthday, given 7% rates of return on your savings. a) What would be the present value of this amount on your 24th birthday? B) If you wanted to put an equal amount into your retirement account each year, beginning on your 25th birthday, and ending with the final payment on your 65th birthday, how much would you need to set aside each year?
You want to make sure that you have $9,000 after 3 years to pay off for a debt. Your salary allows you to save $200 each month, what type of interest you need to ensure that you have enough money?