Researching retirement savings online, you found an article from NewRetirement.com with recommendations from financial guru, Dave Ramsey and others. Dave Ramsey recommends investing 15% of every paycheck into a Roth IRA and pre-tax retirement accounts. If your household earns $75,000 annually and you adhere to Ramsey's recommendation, how much will your retirement account be worth if your 15% ordinary annuity earns 9% annually for 30 years? (Use Table 13.1) Note: Do not round intermediate calculations. Round your answer to the nearest dollar. Answer is complete but not entirely correct. $ 1,533,460 Worth of retirement account

Researching retirement savings online, you found an article from NewRetirement.com with recommendations from financial guru, Dave Ramsey and others. Dave Ramsey recommends investing 15% of every paycheck into a Roth IRA and pre-tax retirement accounts. If your household earns $75,000 annually and you adhere to Ramsey's recommendation, how much will your retirement account be worth if your 15% ordinary annuity earns 9% annually for 30 years? (Use Table 13.1) Note: Do not round intermediate calculations. Round your answer to the nearest dollar. Answer is complete but not entirely correct. $ 1,533,460 Worth of retirement account

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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Similar questions

You want to start saving for retirement by opening an RRSP account. You have no savings yet but that's okay because you are still young. You plan to retire in 30 years. Upon retirement, you would like to be able to spend $120,000 a year for 20 years. You fund this spending by making beginning of month withdrawals that are the same amount (size) every month. The first withdrawal occurs once you begin your retirement in 30 years. The last withdrawal occurs at the beginning of the last month of your retirement horizon. How much do you need to deposit at the end of each month for the next 30 years in order to achieve your retirement objective? Your RRSP account pays 7.7% p.a. compounded semi-annually during both savings and retirement periods.
Your best friend Mary is in discussion with you about saving for her retirement. You are to advise her on how much she should deposit annually to meet her retirement needs. Assume that she will deposit a fixed annual amount for the next 20 years into a retirement savings account, starting one year from now. Mary has a daughter who will be attending college and plans to make 5 withdrawals (starting one year after making her final deposit into the retirement account) of $35,000 each to pay for her annual tuition for the following 5 years. Commercial Banks will be paying 6 percent on such retirement accounts for the next 25 years. Kindly advise Mary on how much she should place in the account annually to cover her retirement needs.
You have decided to start a savings plan for your retirement. You plan to make an annual deposit of $50,000 each year for the next 6 years. The first deposit to be made one year from today. The bank pays a nominal interest rate of 5% annually. How much your savings account with the bank be if you leave the money in the bank to be withdrawn all in 19 years from today? Round to the nearest $0.01. DO NOT use the $sign. Do not use commas to separate thousands. For example if you obtain $1,433.728 then enter 1433.73; if you obtain $432 then enter 432.00 Your Answer: Answer
Your best friend Sam is in discussion with you about saving for his retirement. You are to advisehim on how much he should deposit annually to meet his retirement needs. Assume that he willdeposit a fixed annual amount for the next 20 years into a retirement savings account, startingone year from now. Sam has a son who will be attending college and plans to make 5 withdrawals(starting one year after making his final deposit into the retirement account) of $35,000 each topay for his annual tuition for the following 5 years. Commercial Banks will be paying 6 percenton such retirement accounts for the next 25 years. Kindly advise Sam on how much he shouldplace in the account annually to cover his retirement needs.
Elijah James is in his early 30s and is thinking about opening an IRA. He can't decide whether to open a traditional/deductible IRA or a Roth IRA, so he turns to you for help. To support your explanation, you decide to run some comparative numbers on the two types of accounts; for starters, use a 30-year period to show Elijah what contributions of $5,000 per year will amount to (after 30 years) if he can earn, say, 12 percent on his money. Round your answers to the nearest dollar. 1A. traditional IRA $___1B. Roth IRA $ _____ Will the type of account he opens have any impact on this amount?-Select: YES OR NO Assuming that Elijah is in the 25 percent tax bracket (and will remain there for the next 30 years), determine the annual and total (over 30 years) tax savings he'll enjoy from the $5,000-a-year contributions to his IRA. Contrast the (annual and total) tax savings he'd generate from a traditional IRA with those from a Roth IRA. If an answer is zero, enter "0". Round your answers…
Assuming a tax rate of 30%, a nominal return of 9%, a savings period of 35 years, and an annual deposit of $10,000 into an RRSP, how much will a person have saved for retirement? What is your recommendation regarding when the contributions should be made to the RRSP? Justify your answer using the time value of money

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