The Hernandezes seem to receive most of their income from labor rather than investments. What actions would you recommend for them to remedy that imbalance over the next few years?
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The Hernandezes seem to receive most of their
income from labor rather than investments. What
actions would you recommend for them to remedy
that imbalance over the next few years?
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Solved in 2 steps
- (Click on the into a spreadsheet.) Annuity B C Premium paid today $24.098.32 $22,274.30 $31,240.13 $30,150.95 Annual benefit $3,200 $4100 $4,000 $4,200 Life (years) 20 10 15The minimal impact time has on the value of money makes waiting to prepare for retirement something that can wait until we are within 5-10 years of actually retiring. a) True b) FalseAn individual has determined utilizing the annuity method of capital needs analysis that he needs $1,045,656 at the beginning of his retirement to meet his retirement life expectancy goals. If this individual would like to be more conservative in his retirement planning forecast and maintain this capital balance throughout his retirement life expectancy of 32 years, given an expected earnings rate of 6%, and an inflation rate of 3% during the period, how much more would he need to have at the beginning of his retirement?
- If we realize that our retirement plan will not be able to provide the desired income during our retirement period, we should make some corrections. From the measures listed below, choose the one that WILL NOT help us to achieve our financial goals during our retirement period. * Reduce our required income in retirement. Increasing the contributions to our retirement portfolio during our working period (that is, before we retire). Stop making deposits in our Individual Retirement Account (IRA). Trying to increase the rate of return of the investments we do to our retirement portfolio before retirment. Delay our retirement to a later date.BhupatbhaiAssume Sheryl Jenkins wants to accumulate $12,241.30 in two years. She currently has $10,919.00 to invest. What interest rate must she earn on her investment (that is if she deposits $10,919.00 today) to have $12,241.30 exactly two years from today?
- Assume that your father is now 50 years old, plans to retire in 10 years, and expects to live for 25 years after he retires - that is, until age 85. He wants his first retirement payment to have the same purchasing power at the time he retires as $50,000 has today. He wants all his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: Your father realizes that if inflation occurs the real value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, 10 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 4% per year from today forward. He currently has $75,000 saved and expects to earn a return on his savings of 10% per year with annual compounding. How much must he save during each of the next 10 years (with equal deposits being made at the end of each year, beginning a year from today) to…a). Akua intends to save 1,000 a year for her retirement until she is 55 years old, at this age, she will stop paying into the account, though she will retire at 65. If the retirement account earns 10% interest per year, how much will Akua have saved at age 65? She is 35 years at the moment. b). Financial markets and its institutions are seen as the central nervous system of an economy and must be regulated at all times. Discuss the key roles played by financial markets, and outline two (2) reasons why they must be regulated. c). Explain the difference between money market and capital market and mention two (2) securities traded in each of these markets. d). MTN was able to raise only GH¢1.15billion out of the expected GH¢3.48billion from its Initial Public Offering which lasted from May 29, 2018 to July 31, 2018. Even though the share sale exceeded the minimum of GH¢348million or 10 percent of the total required for the offer to be declared successful, it still represented only 32.97…The expenses associated with sending two children through college prevented Victor and Maria Hernandez from adding substantially to their investment program. Now that their younger son, Joseph, has completed school and is working full time. They would like to build up their investments quickly. Victor is 47 years old and wants to retire early, perhaps by age 60. In addition to the retirement program at his place of employment, Victor believes that their investment portfolio, currently valued at $115,000, will need to triple to $345,000 by his planned retirement time, in 13 years. He and Maria realize that they will have to sacrifice a lot of current spending to save and invest for retirement. What rate of return is needed on the $115,000 portfolio to reach their goal of $345,000 (assuming no additional contributions)? Use Appendix A-1 or visit the Garman/Forgue companion website. Round your answer to the nearest whole number. Round ‘Future Value of a Single Amount’ in intermediate…
- Aura currently pays $800 each month to rent her apartment. Due to inflation, however, her rent is increasing by $50 each year. Meanwhile, her monthly take-home pay is $1500 and she predicts that her monthly pay will only increase by $15 each year. Assuming that her rent and take-home pay will continue to grow linearly, will her rent ever equal her take-home pay? If so, when? And how much will rent be that year?Joy is nearing retirement and is considering buying an annuity product from Wagon Financial. However, she is considering adding a clause that says she will only receive the annual $80,000 payment if she is alive at the time of the payment (up to a maximum of 20 payments). Other than this clause, the specifications for the annuity she is considering are exactly the same as described above. Should Joy expect the price for this product to be cheaper or more expensive by adding this clause?Joe wants to own a home in the future. He asks you describe an advantages and disadvantage of a FRM versus an ARM. He then asks you to describe the advantages and disadvantages of a 15-year loan versus a 30-year loan. He also wants to know how the portion of the home payment that comprises interest changes over the years assuming he takes out an FRM. Is there anything he can do to reduce the total amount he’ll pay for the home? What else would be added to his monthly mortgage payment? What are three benefits of home ownership? What are three benefits of renting?