small changes. Maria estimates she will need $35,000 per year in retirement. Social Security will pay $12,000 per year, so her savings must generate $23,000 per year for 20 years after she retires at age 67, based on actuarial tables for life expectancy. If the return on savings is zero, how much does she need at age 67 Oa. $460,000 Ob.$300,000 Oc $3,000,000 Od. $200,000

small changes. Maria estimates she will need $35,000 per year in retirement. Social Security will pay $12,000 per year, so her savings must generate $23,000 per year for 20 years after she retires at age 67, based on actuarial tables for life expectancy. If the return on savings is zero, how much does she need at age 67 Oa. $460,000 Ob.$300,000 Oc $3,000,000 Od. $200,000

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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The recommended level of retirement savings an individual should have saved at each age is as follows: a. At age 30: 1X income at age 30 b. At age 40: 3X income at age 40 c. At age 50: 5X income at age 50 d. At age 70: 7X income at age 70 Required: Bob makes $90,000 a year in income at age 50, and his salary is growing at 5 percent per year. He currently has retirement savings of $400,000. He wants to know if he will have enough income to retire at age 70. Bob could ask the below questions regarding his retirement savings and for each of these questions, determine which type of analytics might address it. Question How much retirement savings did we have at age 30? Age 40? How do we adjust our savings pattern to meet the expected retirement savings target? What is the forecasted level of income at age 70? Given the expectations given of retirement income at ages 30, 40, 50, and 70, how much does the savings to date differ from that expected? What is the forecasted retirement savings?…
Raymond wants to save the college tuition fees his child will need in ten years by starting with a deposit of $7,500 today and depositing another $200 at the beginning of each month. How much will Raymond have in ten years if he gets a rate of return of 4% per annum? a. $37,201 b. $39,057 c. $40,537 d. $40,441
Excel Master It! Problem This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement: 30 Amount to withdraw each year: $90,000 Years to withdraw in retirement: 20 Interest rate: 8% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account for her retirement fund. If she starts making these deposits in one year and makes her last deposit on the day she retires, what amount must she deposit annually to be able to make the desired withdrawals at retirement? Suppose your friend just inherited a large sum of money. Rather than making equal annual payments, she decided to make one lump-sum deposit today to cover her retirement needs. What amount does she have to deposit today? Suppose…
Creating a retirement fund Personal Finance Problem To supplement your retirement, you estimate that you need to accumulate $320,000 exactly 39 years from today. You plan to make equal, end-of-year deposits into an account paying 7% annual interest. a. How large must the annual deposits be to create the $320,000 fund by the end of 39 years? b. If you can afford to deposit only $1,300 per year into the account, how much will you have accumulated in 39 years? a. The annual deposits to create the $320,000 fund by the end of 39 years should be $. (Round to the nearest cent.)
A) Ms. Diana wants to take off next three years of work to travel around the world. Sheestimates her average annual cash need is $20,000. If she needs more funds, she will arrangefrom alternative ways i.e. taking loans or doing some odd jobs etc.Ms. Diana believes that she can invest her savings at 10% until she depletes her funds.You are required to find out how much she should invest now to fund her future cashflow if she is able invests at 10% annually OR what amount she has to invest if she onlyearns 7% annually.The relevant factors from table you will need for this calculation are given below.a) Future value interest factor for a one-dollar annuity compounded from the table at 10% is3.3100 and at 7% is 3.2149 on period#3b) Present value interest factor for a one-dollar annuity discounted from the table at 10% is2.4869 and at 7% is 2.6243 on period#3B) What is the difference between Present value & Future value?___________________________________________
Please help me. I dont understand the steps.
6) Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges. a. How much will she need to save to cover both the down payment and bank charges? b. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?
A 30 year old person plans to retire at age 65 with an equivalent lump sum of $1,000,000. They currently have $50,000 saved. How much more will they need to save constantly every year until retirement in order to accumulate the required lump sum if all savings earn a net total return of 6% pa?
Jane wants to retire with $2,000,000 in her retirement account exactly 35 years from today. If she thinks she can earn an interest rate of 10. percent compounded monthly, how much must she deposit each month to fund her retirement? $432.83 O $493,32 O $526.78 $582.32
Creating a retirement fund Personal Finance Problem To supplement your retirement, you estimate that you need to accumulate $220,000 exactly 45 years from today. You plan to make equal, end-of-year deposits into an account paying 8% annual interest. a. How large must the annual deposits be to create the $220,000 fund by the end of 45 years? b. If you can afford to deposit only $440 per year into the account, how much will you have accumulated in 45 years? (---) a. The annual deposits to create the $220,000 fund by the end of 45 years should be $. (Round to the nearest cent.)
. Problem 5.03 (Finding the Required Interest Rate) еВook Your parents will retire in 16 years. They currently have $400,000 saved, and they think they will need $2,100,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Josephine is 20 years old and wants to save $1 million dollars for retirement in 50 years. Assume she invests in a savings account that earns at least the current rate of inflation (6.8%). Determine how much Josephine must save today to reach her retirement goal. $15,247.40 $37,276.71 $65,584.95 $131,169.90

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