Jenny Gumbles is a 40-year-old dolphin trainer. She earns $80,000 a year and has a 10-year-olddaughter named Gertrude. She has asked for your help to figure out her retirement plan. Jennycurrently has $55,000 in her retirement account, and she wants to retire in 25 years. Shecontributes $5000 to her account each year. 50% of her investment portfolio is in low risk, lowreturn bonds, and the other 50% is in moderate risk, higher return stock index funds. Overall, herinvestments have earned 5% per year, which is what she expects to continue until she retires. Withthis information, you calculate that Jenny will have $424,885.02 when she retires. Jenny issurprised and disappointed by this, so she asks you for advice on how to have more money whenshe retires.1. For each of the TVM variables in her current plan (Rate, NPER, PMT, PV), should Jenny increaseor decrease that variable to have more money when she retires?2. Think about the real steps Jenny would have to do to change these variables. Which variable (orvariables) would be hardest (or most impractical or unpleasant) to change by a decent amount(such as 10-20%)? Why?3. Which variable (or variables) would be easiest (or least impractical or unpleasant) to change by10-20%? Why?4. Overall, what would you recommend she do? Why? (note: If you have time for it you can playaround with the numbers to suggest some specific numbers/changes, but it's not required. Ithink one person did it last year.)

Future value of the investment depends on the interest rate and time period and amount being…

Answered: She earr a year and has hter named…

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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Your client is 32 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $7,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 11% in the future. a. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much will she have at 70? Do not round intermediate calculations, Round your answer to the nearest cent. 2$ c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $
Only by formula please!!! Linda is saving for retirement and would like to accumulate $750,000 at her retirement. She currently has $40,000 saved and would like to work for another 30 years. She plans to save $5000 at the end of each year over the next 30 years. What rate of return must she earn on her investments over the next 30 years?
Mike and Emily each have invested $100, 000 in an investment account. No other contributions will be made to their investment account. Both have the sarne goal; they each want their account to reach $3,000,000 at which time each will retire. Mike has his money invested in risk free securities with an expected return of 12% compounded monthly. Emily has her money invested in a stock fund with an expected return of 15% compounded quarterly. How many years after Emily retires will Mike retire?
Your client is 38 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $14,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 8% in the future. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent. $ She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $
sonia which to establish a trust fund from which her son can withdrew $6000 every six months for 15 years , when he reach 16 years old.At the end of which time he will receive the remaining money in the trust,which you would like to be $25000. The trust will be invested at 6% per annum compounded semi-annual .How large should the trust be ?
Your sister turned 35 today, and she is planning to save $60,000 per year for retirement, with the first deposit to be made one year from today. She will invest in a mutual fund that's expected to provide a return of 7.5% per year. She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can she spend each year after she retires? Her first withdrawal will be made at the end of her first retirement year. a. $266,770.46 b. $556,561.79 c. $598,303.93 d. $517,731.90 e. $248,158.57
Doris plans to save $5000 per year for the next 35 years. Her money will be deposited in a stock market index fund that has a 0.5% annual management fee. If this fund earns 6% per year, how much will Doris save by investing in this fund instead of an actively managed mutual fund that has a 1% annual fee? Compute your answer as a future amount at the end of year . Assume that payments are made at the end of year. The future equivalent of savings amount at the end of year 35 is ___.

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