Suppose that Richard has recently successfully undergone a medical procedure which has cleared him of the disability. He can now earn $15 per hour. This means that Richard can now make $30,000 if he works 2000 hours per year. Move the budget constraint to illustrate the change in Richard's circumstances.
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- Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won’t be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the payment on your college loans, which will be paid off after 10 years). How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the…A young engineer wants to retire at 60. They want to have $50,000 a year to augment social security. They want this to last 20 years. If they invest their money starting at age 20 at 4% annual interest, how much must they save per month to accomplish their retirement goal?A father is now planning a savings program to put his daughter through college. She is 13, plans to enroll at the university in 5 years, and she should graduate 4 years later. Currently, the annual cost (for everything - food, clothing, tuition, books, transportation, and so forth) is $15,000, but these costs are expected to increase by 6% annually. The college requires total payment at the start of the year. She now has $9,000 in a college savings account that pays 8% annually. Her father will make six equal annual deposits into her account; the first deposit today and sixth on the day she starts college. How large must each of the six payments be? (Hint: Calculate the cost (inflated at 6%) for each year of college and find the total present value of those costs, discounted at 8%, as of the day she enters college. Then find the compounded value of her initial $9,000 on that same day. The difference between the PV of costs and the amount that would be in the savings account must be…
- Ishan and Hazel plan to retire at age 60 with a retirement income of $48,000 a year from their savings. Rather than pay themselves the whole amount at the beginning of each year, they have decided that payment at the beginning of each quarter of $12,000 gives them the right balance of flexibility and maximized interest earnings. They feel they can safely earn an interest rate of 6.5%, compounded quarterly, on their money and they are budgeting based on the prediction that they will live until they are 90 years old. How much money will they have to have saved by the time they are 60 in order to reach their retirement goal? If the same total calculated above was to be saved, but no interest earned whatsoever, how much would be available to live on each quarter? If the full 30 years are lived and quarterly budget spent, how much money in total will have been utilized in retirement? How much will have been earned in interest?The Jeffersons have asked you what would be needed to fund the children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%. A. Assuming no existing assets are dedicated to college, what is the annual savings amount required to fund the children’s education? The Jeffersons’ goal is to have an amount at the beginning of the freshman year for each child that is sufficient to fund a serial payment covering the $24,000 of current costs of college adjusted for inflation for each of the four years of college. Please include your calculator keystroke inputs [PV, I/YR, N, FV, and PMT (if needed)] for each step of this calculation. Also include whether any PMTs are in the end mode or the begin mode. B. What would you say to the Jeffersons about their education funding situation? Write a script of a single paragraph as if you…Imagine you are helping a client, Jill Pole, prepare for retirement Jill would like to withdraw $14,411 from her retirement fund exactly one month after she quits her job. Jill would like all subsequent monthly withdrawals to grow at an effective annual rate of 2.5%. Further, Jill would like to have her funds invested to earn an effective annual return of 7.7%. Jill expects to live for 26 years once she retires and does not plan to leave an inheritance. How much does Jill need to have in her retirement account on the day she retires in order to fund this stream of growing monthly distributions from her retirement account?.
- Kenji wants to retire with an income of $7000 per month over 25 years. His money is saved in a retirement account that pays 6% per year compounded monthly. SHOW how you arrived at your answer by reporting formula(s), variable values, or TVM Solver inputs. a. How much does Kenji need to have saved in retirement to have enough for the $7000 per month income? Include correct units. b. How much does Kenji need to save each month if he works for 30 years in order to have saved the amount from part a? Include correct units.An engineer changed jobs and is signing up for benefits. The company 401(k) includes a low-cost fund that is expected to earn 5.3% annually. The engineer’s employer will contribute up to 2% by matching half the employee contribution. So she will save at least 4% of her salary of $80,000 into the account. She expects her salary to increase 2.5% per year. What is the value of the account after 15 years if she deposits the 4% minimum?You have been hired for your dream job in healthcare. Your salary is $10,000 per month. Your taxes are $2500 per month. Your rent, food and transportation are a total $5000 per month. How much is your gross income? How much is your disposable income? What is another more common word for disposable income? How much is your discretionary income? Give me one example of what you would use your discretionary income for and how much you'd spend on that item?
- 1. The home improvement center (HIC) has an employment contract with the newly hired CEO. The contract requires a lump-sum payment of 32.4 million dollars to be paid to the CEP upon the successful completion of her first five years of service. HIC, wants to set aside an equal amount of money at the end of each year to cover this anticipated cash outflow and will earn 7,25% on the funds. How much must HIC is set aside each year for this purpose? a) 7 270 433 b)5 227 064 c)5 668 987 d) 5 606 026 e) 6 778 958Paul just graduated from college and landed his first "real" job, which pays $43.200 a year. In 13 years, what will he need to earn to maintain the same purchasing power if inflation averages 2 percent? The future value, Fv, Paul will need to earn if inflation averages 2 percent is $______ (Round to the nearest cent.) Please answer fast i give you upvote.An engineer intends to travel abroad to take a postgraduate course at a maternity hospital. He estimates that he needs $5,000 to establish himself and another $3,000 monthly for two years to complete the course. What value would he need to have today to make his plans viable, considering that he could apply the money at a rate of 6.0% per year?