You have $20,000 in your retirement fund that is earning 5.5 percent per year, compounded quarterly. How many dollars in withdrawals per month would reduce this nest egg to zero in 20 years? Use Exhibit 14-7. How many dollars per month can you withdraw for as long as you live and still leave this nest egg intact? Use Exhibit 14-7.

You have $20,000 in your retirement fund that is earning 5.5 percent per year, compounded quarterly. How many dollars in withdrawals per month would reduce this nest egg to zero in 20 years? Use Exhibit 14-7. How many dollars per month can you withdraw for as long as you live and still leave this nest egg intact? Use Exhibit 14-7.

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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Similar questions

Creating a retirement fund Personal Finance Problem To supplement your retirement, you estimate that you need to accumulate $320,000 exactly 39 years from today. You plan to make equal, end-of-year deposits into an account paying 7% annual interest. a. How large must the annual deposits be to create the $320,000 fund by the end of 39 years? b. If you can afford to deposit only $1,300 per year into the account, how much will you have accumulated in 39 years? a. The annual deposits to create the $320,000 fund by the end of 39 years should be $. (Round to the nearest cent.)
Suppose that you save for retirement by contributing the same amount each month from your 23 rd birthday until your 65th birthday, in a retirement account that pays a steady return of 7.5 percent compounded monthly? Every month you save $100.
You want to save money for retirement. Your savings pattern is as follows: First 5 years: You save $2200 each year Next 14 years: In the 6th year, you save $2100 and decrease your savings by $100 in each following year. How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?
Assume that you contribute $5,000 per year to a retirement plan for 20 years. Then you are able to increase the contribution to $7,500 per year for another 20 years. Given an 8.0 percent interest rate, what is the value of your retirement plan after 40 years? Hint: This is equivalent to saving $5,000 each year for 40 years (from year 1 to year 40) and $2,500 each year for 20 years (from year 21 to year 40) O $$1,455,270 O $1,409,688 O $$1,492,875 O $1,411,904
Suppose your parents have just retired and have $1 million in a retirement account. For how many years can they withdraw $5,000 at the beginning of each month for expenses, assuming that the account will continue to earn a 5 percent annual return until it is exhausted?
You are offered an annuity that will pay $10,000 a year for ten years (that is, ten payments), but the payments start after five years have elapsed. If you want to earn 8 percent on your funds, what is the maximum you should pay for this annuity? Show formula and all working
You decide to make monthly payments into a retirement fund earning 4.75% compounded monthly. Note: Payments are made at the end of each period.
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 22nd 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 8%, 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 would like to have 950,000 when you retire in 30 years. How much should you invest each quarter if you can earn a rate of 4.8% compounded quarterly? How much should you deposit each quarter? How much total money will you put into the account? How much total interest will you earn?
Use the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 4%. How much should you deposit monthly to accumulate $87,000 in 15 years? You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.)
Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the scholarship, you plan to make 12 annual contributions of $9.9k to an investment account with an expected return of 6.0% interest annually. Your first contribution occurs today. If the scholarship fund makes its first payment two years following the last contribution, then what is the fixed annual payment that the scholarship fund will award? (Round to the nearest dollar)
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $60,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 6.6% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday?

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