You believe you will spend $44, 000 a year for 16 years once you retire in 32 years. If the interest rate is 7% per year, how much must you save each year until retirement to meet your retirement goal? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

You believe you will spend $44, 000 a year for 16 years once you retire in 32 years. If the interest rate is 7% per year, how much must you save each year until retirement to meet your retirement goal? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

See similar textbooks

Related questions

Q: You plan to deposit $6,000 at the end of each of the next 25 years Into an account paying 10.3…

A: Perodic Payment(PMT) is $6,000 Per Year Interest rate is 10.3% Time Period 25 years & 50 Years…

Q: You want to be a millionaire when you retire in 40 years. a. How much do you have to save each month…

A: The time value of money is a concept in finance that evaluates the worth of cash flows occurring at…

Q: Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase…

A: Future value refers to the value an investment or cash flow is expected to grow to at a specific…

Q: Assume that you contribute $330 per month to a retirement plan for 15 years. Then you are able to…

A: This is an annuity where we make equal contributions each month. To get the value of the investment…

Q: How much would you need to deposit in the account each month?

A: Information Provided: Future value = $410,500 Years = 15 Interest rate = 6.5% Deposits frequency =…

Q: what is the value of your retirement plan after the 50 years? (Do not 3 decimal places)

A: The future value can be compared to the projected how much money you will have in the future from…

Q: Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to…

A: Future value (FV) in the back signifies the anticipated worth of a venture or resource at an…

Q: You plan on investing $1.900 every 4 years while earning 6% per year. How much money will you have…

A: Future value refers to the concept of time, the value of money which is used for computing the value…

Q: What real annuity (in today’s dollars) will $1 million support if the real interest rate at…

A: Present Value = pv = $1 millionInterest rate = r = 2.3%Time = t = 20 Years

Q: You are planning to make monthly deposits of $475 into a retirement account that pays 10 percent…

A: Given:

Q: If you invest your retirement (any amount) yielding 4.34% per year, how many years will it take to…

A: Value of money changes with time due to interest rate and inflation and money has time value due to…

Q: How much must you deposit each year into your retirement account starting now and continuing through…

A: Monthly deposit It is the minimum deposit amount required to pay in an account each month by the…

Q: You are 46 years from retirement. Starting now, if you save $8,141 at the end of every year until…

A: P = $8141r = 0.058n=46FV=?

Q: You plan to depost $5.300 a paying 10.3 percent interest & How much money will you have in the…

A: We can determine the FV of an annuity using the formula below:In the formula above, PMT = periodic…

Q: You are planning to make monthly deposits of $300 into a retirement account that pays 8 percent…

A: Future value is the amount of money worth at a future date. This can be calculated based on the time…

Q: How much must you deposit each year into your retirement account starting now and continuing through…

A: yearly deposit refers to the amount deposited every year for the accumulation of money for the…

Q: Suppose you retired at age 65 and your retirement benefits is $50,000 which remains constant for the…

A: Given: Year 1 , PMT = $50000 It grows by 5% till year 25 Rate of interest = 7%

Q: You want to retire at age 65. You decide to make a deposit to yourself at the end of each year into…

A: Annual rate (r) = 3% or 0.03Annual Payment (P) = $1,400Number of years (n) = 65 - 25 = 40Payment…

Q: Assume that you contribute $280 per month to a retirement plan for 25 years. Then you are able to…

A: The FV of an investment refers to the cumulative worth of the investment's cash flows at a future…

Q: Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once…

A: Given information : Years to retirement = 40 years Funds needed after retirement = $50,000 Interest…

Q: You believe you will need to have saved $339,000 by the time you retire in 30 years in order to live…

A: In this we have calculate the future value of inheritance amount and than deduct from retirement…

Q: You want to have $5 million when you retire in 30 years. You feel that you can save $750 per month…

A: The objective of this question is to find out the Annual Percentage Rate (APR) that needs to be…

Q: You believe you will spend $47,000 a year for 13 years once you retire in 26 years. If the interest…

A: Solution:-When an equal amount is spent each period, it is known as annuity.We know, present value…

Q: If you invest $17,500 today, how much will you have in each of the following instances? Use Appendix…

A: Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: You believe you will need to have saved $593,000 by the time you retire in 30 years in order to live…

A: Given: Future value required = $593,000 Retiring at age = 30 years Interest rate = 7% Amount to be…

Q: You have just made your first $4,300 contribution to your retirement account. Assume you earn a…

A: The future value of an investment is the amount of money it will be worth at a future point in time,…

Q: One year from now you will need a $1,000 deposit to rent a new apartment. You now have $927.…

A: Future Value Future value refers to the value of the investment at a certain point in time in future…

Q: Your retirement account has a current balance of $3, 123. What interest rate would need to be earned…

A: Here,CurrentBalance in account is $3,123Annual Contribution is $3,123Time Period is 24 yearsRequired…

Q: f you invest $17,500 today, how much will you have in each of the following instances? Use Appendix…

A: Step 1 The value of an asset at a future date is its future value. It calculates the nominal amount…

Q: You believe you will spend $48,000 a year for 12 years once you retire in 24 years. If the interest…

A: First we need to find present value of our cash requirement at the time of retirement then we use…

Q: You decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need…

A: Interest rate (r)= 3% Compounding (k)= annually Time period (n)= 30 years Retirement Income (d)=…

Q: ou decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need…

A: PV is the current worth of cash flows that are expected to occur in the future.

Q: After learning about the time value of money, you decided to open a retirement account. You will…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Question

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1: Explanation of TVM

VIEW

Step 2: Calculation of the annual savings required

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

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 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 believe you will spend $47,000 a year for 13 years once you retire in 26 years. If the interest rate is 7% 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.) Annual savings
Assume that you contribute $280 per month to a retirement plan for 25 years. Then you are able to increase the contribution to $480 per month for the next 25 years. Given a 7.2 percent interest rate, what is the value of your retirement plan after the 50 years? Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
How much must you deposit each year into your retirement account starting now and continuing through year 10.00 if you want to be able to withdraw $95000 per year forever, beginning 33.00 years from now? Assume the account earns interest at 9.00% per year. (Round the final answer to three decimal places.) The amount to be deposited is determined to be $
Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase the contribution to $274 per month for another 20 years, and finally, $424 per month for the last 10 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Value of retirement assets
After learning about the time value of money, you decided to open a retirement account. You will invest $475 each month. It earns an annual interest rate of 10.8% per year. Your first deposit will be made one month from now. What is the value of your account in 33 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Retirement account value
You plan on investing $1.900 every 4 years while earning 6% per year. How much money will you have in total, immediately after investing the last payment amount? Round your answer to the nearest 2 decimal places and do not include a dollar sign. For instance 46.75.
How much must you deposit each year into your retirement account starting now and continuing through year 10 if you want to be able to withdraw $90,000 per year forever, beginning 29 years from now? Assume the account earns interest at 14% per year. The amount to be deposited is determined to be $________ .
Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $600 per month for another 25 years. Given a 6.0 percent interest rate, what is the value of your retirement plan after the 40 years? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Future value of multiple annuities
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%?
Your retirement account has a current balance of $3, 123. What interest rate would need to be earned in order to accumulate a total of $5,000,000 in 24 years by adding $3,123 annually? Is this possible? Why or why not?
Choose the appropriate formula type for answering the following question: Suppose you want to have $410,500 for retirement in 15 years. Your account earns 6.5% interest. How much would you need to deposit in the account each month? Annuity Compound Interest Loan/Payout Annuity