You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $240,000 per year for the next 30 years (based on family history,you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% peryear. You will leave the money in this fund until it is completely depleted when you are 70 years old.EClick the icon to view the present value annuity table.)(Click the icon to view the future value annuity table.)(Click the icon to view the present value table.)E (Click the icon to view the future value table.)To make your plan work answer the following questions:1 (Click the icon to view the questions.) 3. How much must you pay into the investment each year for the first ten years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) (Round your answer to thenearest whole dollar.)You must pay $into the investment each year for the first ten years.4. How does the total out-of-pocket savings compare to the investment's value at the end of the ten-year savings period and the withdrawals you will make during retirement? (Use the investmentrounded to the nearest whole number that you calculated above, then round your final answer to the nearest whole dollar.)The total out-of-pocket savings amounts to $This is farless than the investment's worth at the endof ten years and remarkablylower v than the amount of money you will eventually withdraw from the investment.

In order to determine the Amount of Investment that a person needs to make each year for 10 years…

You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $240,000 per year for the next 30 years (based on family history, you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. FClick the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value table.) To make your plan work answer the following questions: A (Click the icon to view the questions.)

You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $240,000 per year for the next 30 years (based on family history, you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. FClick the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value table.) To make your plan work answer the following questions: A (Click the icon to view the questions.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Reference Present Value of $1 12% 14% 16% 18% 20% Periods 1% 2% 3% 4% Period 1 0.990 0.980 0.971 0.962 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 5% 6% 8% 10% 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.980 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.826 0.797 0.769 0.743 0.718 0.694 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.933 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 Period 11…
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