• You plan to retire in 30 years. • In 50 years, you want to give your daughter a $500,000 gift. • You will receive an inheritance of $200,000 in 25 years. • You think you will want $50,000 per year for 30 years when you retire (the first withdrawal will come one year after retirement). • You will begin saving an amount to meet your retirement goals one year from today, and your last contribution will be in 30 years. Required: • If you think you can make 9% on your investments, how much will you need to save each year for the next 30 years to meet your retirement goals?

• You plan to retire in 30 years. • In 50 years, you want to give your daughter a $500,000 gift. • You will receive an inheritance of $200,000 in 25 years. • You think you will want $50,000 per year for 30 years when you retire (the first withdrawal will come one year after retirement). • You will begin saving an amount to meet your retirement goals one year from today, and your last contribution will be in 30 years. Required: • If you think you can make 9% on your investments, how much will you need to save each year for the next 30 years to meet your retirement goals?

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

A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.$ At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.$
You are saving for retirement. To live comfortably, you decide you will need to save $1 million by the time you are 65. Today is your 31st 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 9%, how much must you set aside each year to make sure that you will have $1 million in the account on your 65th birthday? $0 The amount to deposit each year is $ (Round to the nearest dollar.) et more help Clear all
You are planning for your retirement. You expect to earn a monthly salary of $7,000 starting on the 1st month after you retire, which will be able to provide comfortably for your daily expenses through your retirement years. You are currently 33 and plan on retiring when you become 64, and you expect to live 20 years after retirement. In addition to providing a salary for your retirement you would like to buy a house by the time you reach 55. The house you dream of would cost you $1,650,000. Now you have a down payment of $50,000 (ignore closing costs). In addition you would like to offer yourself a retirement gift, a Mercedes that you would buy brand new to serve you through your retirement years. The car is expected to cost you $76,000. It will be purchased when you reach 64 years of age. Assume you can earn 12% compounded monthly from now until you retire, and the rate will change to 6% monthly compounding after that. How much should you save per month to be able to buy the car…
Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information: Years until retirement: 30 Amount to withdraw each year in retirement: $120,000 Years to withdraw in retirement: 12 Interest rate while saving: 9% Interest rate in retirement: 6% Saved today (nest egg): $25,000 The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not occur until one year after she retires, and she plans to spend her entire nest egg. Calculate the amount she must deposit each year to reach her retirement goal. (Round to 2 decimals)
As part of your financial planning and to supplement your retirement, you decided to save $3000 at the end of each year for 30 years, how much money you will have in your account if you can earn 10%?
1) Today is your 30th birthday and you must choose between two retirement options. The first option will provide you with 10 equal annual payments of $100, 000 beginning on your 65th birthday. The second option will provide you with one payment of $1, 000, 000 on your 70th birthday. If the interest rate is 6 percent per year and you are assured of living to at least 80 years of age, which option is better? 2) A retirement home in Florida costs $200, 000 today. Housing prices in Florida are increasing at a rate of 4% per year. Joe wants to buy the home in 8 years when he retires. Joe has $25, 000 right now in a savings account paying 8% interest per year. Joe wants to make eight equal annual deposits into the savings account starting today. How much must each deposit be so Joe will have enough money in his savings account to buy the retirement home when he retires?
You are saving for retirement. To live comfortably, you decide you will need to save $3,000,000 by the time you are 65. Today is your 30th 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 6%, how much must you set aside each year to make sure that you will have $3,000,000 in the account on your 65th birthday? The amount to deposit each year is $ (Round to the nearest cent.)
Your grandparents would like to establish a trust fund that will pay you and your heirs $175,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.4 percent, how much must your grandparents deposit today?
You are saving for retirement. To live comfortably, you decide you will need to save $3,000,000 by the time you are 65. Today is your 29th 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 10%, how much must you set aside each year to make sure that you will have $3,000,000 in the account on your 65th birthday?
You are saving for retirement. To live comfortably, you decide you will need to save $2,500,000 by the time you are 65. Today is your 32nd 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 7%, how much must you set aside each year to make sure that you will have $ 2,500,000 in the account on your 65th birthday? The amount to deposit each year must be $
You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 26th 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 4%, how much must you set aside each year to make sure that you will have $2 million in the account on your 65th birthday?
You are saving for retirement. To live comfortably, you decide you will need to save $4 million by the time you are 65. Today is your 34th 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 $4 million in the account on your 65th birthday? The amount to deposit each year is $(Round to the nearest dollar.)

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