You are 25 years old and decide to start saving for your retirement. You plan to save $4,000 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 40 to start saving (again, with your first deposit at the end of the year)?

You are 25 years old and decide to start saving for your retirement. You plan to save $4,000 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 40 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 want to open a savings plan for your future retirement. You are considering two options as follows: Option 1: You deposit Php 1,000 at the end of each quarter for the first 10 years. At the end of 10 years, you make no further deposits, but you leave the amount accumulated at the end of 10 years for the next 15 years. Option 2: You do nothing for the first 10 years. Then you deposit Php 6,000 at the end of each year for the next 15 years. Compare the amount accumulated in Option 1 and Option 2. If your deposits or investments earn on interest rate of 6% compounded quarterly, and you chose Option 2 over Option 1, At the end of 25 years from now, I will accumulate what amount of money?
You are saving for retirement. To live comfortably, you decide you will need to save $3 million by the time you are 65. Today is your 33rd 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 3%, how much must you set aside each year to make sure that you will have $3 million in the account on your 65th birthday? The amount to deposit each year is $ (Round to the nearest dollar.)
You are thinking of retiring. Your retirement plan will pay you either $200,000 immediately on retirement or $280,000 five years after the date of your retirement. Which alternative should you choose if the interest rate is: 0% per year, you should? 8% per year, you should? 20% per year, you should?
You want to be able to withdraw $40,000.00 from your account each year for 15 years after you retire.You expect to retire in 20 years.If your account earns 5% interest compounded annually, how much will you need to deposit each year until retirement to achieve your retirement goal?You will need to deposit_$_____ each year.
After retirement, you expect to live for 25 years. You would like to have a $95,000 income each year. The annual interest rate is 9 percent per year. Required: Calculate the amount of savings you have in your retirement account to receive this income. 1 Assume that the payments start on the day of your retirement. 2.Assume that the payments start one year after the retirement.
You believe you will need to have saved $593,000 by the time you retire in 30 years in order to live comfortably. You also believe that you will inherit $113,000 in 5 years. 1) If the interest rate is 7% per year, what is the future value of your inheritance at retirement? 2) How much additional money must you save to meet your retirement goal, assuming you save your entire inheritance?
You believe you will spend $48,000 a year for 12 years once you retire in 24 years. If the interest rate is 5% per year, how much must you save each year until retirement to meet your retirement goal? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
You decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need in your retirement account the day you retire to make that happen, assuming a real interest rate of 3%?
Suppose you want to have $300,000 for retirement in 20 years. Your account earns 10% interest. a) How much would you need to deposit in the account each month? S b) How much interest will you earn? S
Your parents will retire in 23 years. They currently have $290,000 saved, and they think they will need $900,000 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.
You have a financial goal to reach: $1,000,000 when you retire. You are currently 20 years old and you plan to retire at 60yrs old If you can earn 15% return on your retirement account, How much do you need to invest today?
You want to be able to withdraw S30, 000 from your account each year for 30 years after you retire.You expect to retire in 25 years.If your account earns 7% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?

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