Today is Derek's 25th birthday. Derek has been advised that he needs to have $2,993,861.00 in his retirement account the day he turns 65. He estimates his retirement account will pay 7.00% interest. Assume he chooses not to deposit anything today. Rather he chooses to make annual deposits into the retirement account

Today is Derek's 25th birthday. Derek has been advised that he needs to have $2,993,861.00 in his retirement account the day he turns 65. He estimates his retirement account will pay 7.00% interest. Assume he chooses not to deposit anything today. Rather he chooses to make annual deposits into the 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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Eugene began to save for his retirement at age 30, and for 13 years he put $ 250 per month into an ordinary annuity at an annual interest rate of 4% compounded monthly. After the 13 years, Eugene was unable to make the monthly contribution of $ 250, so he moved the money from the annuity into another account that earned 5% interest compounded monthly. He left the money in this account for 22 years until he was ready to retire. How much money did he have for retirement? Retirement amount =
If Liam wants to withdraw $19,626.57 every month from his retirement account that pays 7.67%/year for 25 years after he retires. How much should he deposit EVERY MONTH for his 43 years of employment if he starts with an original deposit of $5,357,392.19.
When she turned 30, Arwen started depositing $400 per month in a retirement account that earns 2.4% interest compounded monthly. If she plans to retire when the account contains $200,000, how old will she be when she retires.
Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of each of his biweekly checks; it will earn 9 7/8% interest. He just had his twenty-ninth birthday, and his ordinary annuity comes to term when he is 65. Find the following. (a) The future value of the account$ (b) Dick's total contribution to the account$ (c) The total interest$
Sam is planning to retire in the next few years and wondering how much his annual CPP would be if he delayed claiming it a few years. His CPP statement indicates he would qualify for CPP of $724 per month at age 65. Assume he stops contributing to CPP at age 65. What amount of annual CPP will he qualify for ANNUALLY if he delays retiring until age 68? Input the answer to the nearest dollar. Answer:
Chip and Karla are parents of a young child. They expect their child to attend college exactly 13 years from today, and they wish to have accumulated the amount of $124000 when their child reaches college. In order to meet their goal, they will begin making MONTHLY contributions to a special account devoted to the retirement goal. Contributions to this account will begin one month from today, and will continue placing equal monthly amounts into her retirement account for the next 13 years. What minimum amount needs to be placed in the college savings account at the end of each month so that they will reach their goal if the annual interest rate is 4.80%. $
Today is Janet's 23rdbirthday. Starting today, Janet plans to begin saving for her retirement. Her plan is to contribute $3,000 to a brokerage account each year on her birthday. Her first contribution will take place today. Her 42ndand final contribution will take place on her 64th birthday. Her aunt has decided to help Janet with her savings, which is why she gave Janet $10,000 today as a birthday present to help get her account started. Assume that the account has an expected annual return of 14 percent. How much will Janet expect to have in her account on her 65th birthday? Round your answer to a whole dollar; for example 2345.
Irene plans to retire on December 31st, 2019. She has been preparing to retire by making annual deposits, starting on December 31st, 1979, of $2450 into an account that pays an effective rate of interest of 9.1%. She has continued this practice every year through December 31st, 2000. Her goal is to have $1.5 million saved up at the time of her retirement. How large should her annual deposits be (from December 31st, 2001 until December 31st, 2019) so that she can reach her goal? Payment = $68573.5
Eugene began to save for his retirement at age 35, and for 15 years he put $ 325 per month into an ordinary annuity at an annual interest rate of 8% compounded monthly. After the 15 years, Eugene was unable to make the monthly contribution of $ 325, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 15 years until he was ready to retire. How much money did he have for retirement? If Eugene had waited until he was 44 years old to start saving for retirement and then decided to put money into an ordinary annuity for 21 years earning 8% interest compounded monthly, what monthly payment would he have to make to accumulate the same amount for retirement as you found in the first part of the question?
14. Smart Tabitha has set up a retirement savings account. She has arranged to have $110 taken out of each of her biweekly checks, with contributions made at the end of each two-week period. Her retirement account will earn 97% APR. Tabitha has just had her twenty-ninth birthday, and she can start drawing retirement savings when she is 65. Find the following: (a) The future value of the account when Tabitha turns 65. (b) Tabitha's total contribution to the account. (c) Total interest earned by Tabitha's account.
Eugene began to save for his retirement at age 30, and for 11 years he put $ 275 per month into an ordinary annuity at an annual interest rate of 7% compounded monthly. After the 11 years, Eugene was unable to make the monthly contribution of $ 275, so he moved the money from the annuity into another account that earned 11% interest compounded monthly. He left the money in this account for 24 years until he was ready to retire. How much money did he have for retirement?
Ee 93.

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