You are planning to save for retirement over the next 30 years. To do this, you will invest £500 a month in a share account and £500 a month in a bond account. The return of the share account is expected to be 7 per cent, and the bond account will pay 4 per cent. When you retire, you will combine your money into an account with a 6 per cent return. Required: How much can you withdraw each month from your account assuming a 25-year withdrawal period? (Do not include the pound sign (£). Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Withdrawal amount £

You are planning to save for retirement over the next 30 years. To do this, you will invest £500 a month in a share account and £500 a month in a bond account. The return of the share account is expected to be 7 per cent, and the bond account will pay 4 per cent. When you retire, you will combine your money into an account with a 6 per cent return. Required: How much can you withdraw each month from your account assuming a 25-year withdrawal period? (Do not include the pound sign (£). Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Withdrawal amount £

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Related questions

Q: Show manual calculations for the below: You have 20 years left for your retirement. You wish to…

A: The time value of money is a concept in finance that evaluates the worth of future expected cash…

Q: To supplement your planned retirement, you estimate that you need to accumulate R 220, 000 in 42…

A: Formulas: Future value = Annual payment *((1+rate)^years-1)/Rate

Q: You are planning to save for retirement over the next 35 years. To do this, you will invest $660 per…

A: Money invested in the stock market and bonds would grow to much larger amount due to the compounding…

Q: How much will you have after 5 years? How much will you have after 5 years if you make the deposits…

A: Each year Deposit RM 2500 Interest Rate 4%

Q: You are planning to save for retirement over the next 35 years. To do this, you will invest $641 per…

A: An annuity is a financial product that provides a series of payments made at equal intervals. These…

Q: You plan to invest $2,000 per year into a retirement account. If you earn a compound annual rate of…

A: Retirement planning is important to accumulate the amount for future use. The regular payment is…

Q: You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a…

A: Here, Particulars Stock Bond Monthly deposits (PMT) $1,100.00 $500.00 Interest rate 8.00%…

Q: You are planning to save for retirement over the next 35 years. To do this, you will invest $770 per…

A: Amount in stock account after 35 years: Monthly deposits=$770 Number of years=35 Rate of…

Q: the next year and you ar, how much more will you have when you retire if you wait one year to make…

A: Future Value: The future value is the value of annuity or the sum lump amount after a certain period…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest K700 a…

A: Time Period30Stock Return 10%Bond Return6%Amount In Stock K 700.00Amount In Bond K 300.00

Q: Use the savings plan formula to answer the following question. You put $300 per month in an…

A: Monthly investment = $300Interest rate = 2.5%Period = 17 years

Q: You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year…

A: a. Use the Excel FV function with the following inputs to determine the value of investment on the…

Q: You are planning to save for retirement over the next 35 years. To do this, you will invest $747 per…

A: An annuity refers to a set of periodic payments that are made in exchange for a lump sum payment. It…

Q: You are planning to save for retirement over the next 25 years. To do this, you will invest $7,000 a…

A: The future value of an annuity is the future worth of a cash flow series at a particular time period…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a…

A: Using excel FV and PMT function

Q: You are planning to save for retirement over the next 20 years. To do this, you will invest $700 a…

A: Firstly , we will calculate accumulated value after 20 years using formula of future value of…

Q: You are planning to save for retirement over the next 25 years. To do this, you will invest $1,200 a…

A: First we have to use future value of ordinary annuity formula to calculate amount accumulated after…

Q: You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a…

A: Calculation of monthly withdrawal amount: Answer: Monthly withdrawal amount is $3113.04

Q: You are planning to invest $3,000 in an account earning 7% per year for retirement. a. If you put…

A: Here we will use the concept of time value of money.

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest $1,300 a…

A: An annuity is a financial product or investment that involves a series of regular payments made or…

Q: You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time…

A: Interest bearing account:An interest-bearing account is a financial instrument designed to accrue…

Q: You want to open a savings plan for your future retirement. You are considering two options as…

A: For considering the comparison of accumulated amounts in both the options, we will use future value…

Q: You are planning to save for retirement over the next 35 years. To do this, you will invest $619 per…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Suppose you wish to retire forty years from today. You determine that you need RM50,000 per year…

A: An Annual payment is the equal payment that is paid or received at the end of the year.

Question

Required:

How much can you withdraw each month from your account assuming a 25-year withdrawal period? (Do not include the pound sign (£). Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Withdrawal amount

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Retirement plan

VIEW

Step 2 Calculation:

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You are planning to save for retirement over the next 30 years. To do this, you will invest K700 a month in a stock account and K300 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with an 8 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?
You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month in a stock account and $500 a month in a bond account. The return on the stock account is expected to be 8 percent, and the bond account will pay 4 percent. When you retire, you will combine your money into an account with a 5 percent return. How much can you withdraw each month during retirement assuming a 20-year withdrawal period? Group of answer choices $3,113.04 $3,324.11 $2,636.19 $3,008.21 $2,904.11
You are planning to save for retirement over the next 25 years. To do this, you will invest $1,200 a month in a stock account and $900 a month in a bond account. The return of the stock account is expected to be 7 percent, and the bond account will pay 4 percent. When you retire, you will combine your money into an account with a return of 5 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period? Multiple Choice $621,766.96 $9,279.68 $9.469.06 $9,658.44 $113,628.75
You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month in a stock account and $500 a month in a bond account. The return on the stock account is expected to be 7 percent, and the bond account will pay 4 percent. When you retire, you will combine your money into an account with a 5 percent return. How much can you withdraw each month during retirement assuming a 20-year withdrawal period?
Give typing answer with explanation and conclusion
Manshukh
You plan to invest $2,000 per year into a retirement account. If you earn a compound annual rate of return of 5%, how many years will it take you to reach a balance of $500,000?
You are planning to save for retirement over the next 35 years. To do this, you will invest $641 per month in a stock account and $496 per month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will return 7 percent. When you retire, you will combine your money into an account with a return of 6 percent. How much can you withdraw each month from your account assuming a 30-year withdrawal period?
You are planning to save for retirement over the next 35 years. To do this, you will invest $660 per month in a stock account and $367 per month in a bond account. The return of the stock account is expected to be 11 percent, and the hond account will return 6 percent. When you retire, you will combine your money into an account with a return of 8 percent. How much can you withdraw each month from your account assuming a 30-year withdrawal period?
You are planning to save for retirement over the next 35 years. To do this, you will invest $770 per month in a stock account and $370 per month in a bond account. The return of the stock account is expected to be 9.7 percent, and the bond account with pay 5.7 percent. When you retire, you will combine your money into an account with a 6.7 percent return. How much can you withdraw each month from your account assuming a 30-year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)
Retirement Investment Advisors Incorporated, has just offered you an annual interest rate of 6 percent until you retire in 40 years. You believe that interest rates will increase over the next year and you would be offered 6.6 percent per year one year from today. If you plan to deposit $18,000 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit?