You are 20 years old and decide to start saving for your retirement. You plan to save $5,500 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 66. Suppose you earn 7% per year on your retirement savings. a. How.much will you have saved for retirement? b. How much will you have saved if you wait until age 36 to start saving (again, with your first deposit at the end of the year)?

You are 20 years old and decide to start saving for your retirement. You plan to save $5,500 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 66. Suppose you earn 7% per year on your retirement savings. a. How.much will you have saved for retirement? b. How much will you have saved if you wait until age 36 to start saving (again, with your first deposit at the end of the year)?

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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You are saving for retirement. To live comfortably, you decide you will need to save $3,000,000 by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 6%, how much must you set aside each year to make sure that you will have $3,000,000 in the account on your 65th birthday? The amount to deposit each year is $ (Round to the nearest cent.)
Suppose you want to have $700,000 for retirement in 30 years. Your account earns 10% interest. a) How much would you need to deposit in the account each month? $ b) How much interest will you earn? $ es
Suppose you want to have $800,000 for retirement in 25 years. Your account earns 9% interest.a) How much would you need to deposit in the account each month?$b) How much interest will you earn? $
You plan to retire in 30 years and plan on saving $15,000 annually,starting next year, for the next 30 years. You expect to need $120,000about 18 years from now for college tuition for your recently borndaughter which must be paid out of these savings. You expect to live 35years during retirement (the first retirement payment will be 31 yearsfrom today) If interest rate is 5%, but you want to keep the same retirement quality of life as if the interest rate is 8.15%. How much extra money do you need to save annually?
Suppose you want to have $500,000 for retirement in 25 years. Your account earns 9% interest. a) How much would you need to deposit in the account each month? b) How much interest will you earn?
At age 20 when you graduate, you start saving for retirement. If your investment plan pays an APR of 4.5% and you want to have $5 million when you retire in 45 years, how much should you deposit monthly?
You have decided to start a savings plan for your retirement. You plan to make an annual deposit of $50,000 each year for the next 6 years. The first deposit to be made one year from today. The bank pays a nominal interest rate of 5% annually. How much your savings account with the bank be if you leave the money in the bank to be withdrawn all in 19 years from today? Round to the nearest $0.01. DO NOT use the $sign. Do not use commas to separate thousands. For example if you obtain $1,433.728 then enter 1433.73; if you obtain $432 then enter 432.00 Your Answer: Answer
You would like to save $250,000 for retirement. If you are planning to retire 30 years from now, how much should you deposit each month into an account that pays 7.2% interest compounded monthly? What is the total interest earned? m
Suppose that Paolo is 45 years old and has no retirement savings. He wants to begin saving for retirement, with the first payment coming one year from now. He can save $12,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 8.00% return. Assume that this rate will be constant for the rest of his's life. Paolo would like to calculate how much money he will have at age 65. Using a financial calculator yields a future value of this ordinary annuity to be approximately Paolo would now like to calculate how much money he will have at age 70. Using a financial calculator yields a future value of this ordinary annuity to be approximately at age 65. Paolo expects to live for another 25 years if he retires at age 65, with the same expected percent return on investments in the stock market. Using a financial calculator, you can calculate that Paolo can withdraw retirement at age 65), assuming a fixed withdrawal each year and $0…
Today, you turn 21. Your birthday wish is that you will be a millionaire by your 40th birthday. In an attempt to reach this goal, you decide to save $20 a day, every day until you turn 40. You open an investment account and deposit your first $20 today. What rate of return must you earn to achieve your goal?
Your parents will retire in 19 years. They currently have $200,000 saved, and they think they will need $1,500,000 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.
Suppose you inherit $100,000 at age 25 and immediately invested in a growth fund who’s annual rate of return average is 13%. Five years later, you transfer all proceeds from the scrubs fun into a long-term IRA that pays an average annual rate of 8%. Immediately you start making additional contributions of $7000 per year to the same IRA. Assuming continuous interest, steady interest rates, and a perfect record of making annualcontributions, how much is this IRA worth when you reach the age of 65? The formula that will need to be used is A = P e^r*t + D/r (e^r*t - 1). Hint: use the continuous interest formula to find the accumulated amount for the first five years, which is then the annual investment, P, into the IRA.

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