**Retirement Savings Plan****Objective:** You want to be able to withdraw $35,000 from your account each year for 20 years after you retire.**Timeline:** You expect to retire in 15 years.**Financial Goal:** If your account earns 10% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?---To solve this problem, you need to calculate the annual deposits required to reach your retirement savings goal, considering the specified interest rate and timeline.

Present value (PV) is calculated when future value is known but the investor wants to know the…

Answered: You want to be able to withdraw $35,000…

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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You are planning to save for your retirement during the next 30 years. You want to be able to withdraw $120,000 from your savings account every year for the next 20 years after you retire. You plan to invest your savings in a local bank, which offers 8% APR compounded monthly, and make equal annual payments into this savings account. What amount should be deposited annually in this savings account in order to withdraw $120,000 every year after your retirement?
You want to have 75000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.4 percent interest, what amount must you deposit each year?
You plan on retiring in exactly 6 years and you would like to have a retirement fund balance of exactly $2,000,000 at that time. You are convinced that you can earn an APR (based on monthly compounding) of 5.1%. If you are making beginning-of-the-month payments into the account, how much does each one of the payments need to be in order to reach your target? To nearest $0.01
You are saving for your retirement. You have decided that one year from today you will deposit 5percent of your annual salary in an account which will earn 6percent per year. Your salary currently (today) is $90,000, and it will increase at 2 percent per year throughout your career. How much money will you have for your retirement, which will begin in 40years? Assume your first payment into the account is one year from today after your first increase.In other words, your next year’s paycheck (Year 1) is more than $90,000since it will increase by 2% each year. (
ou 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%?
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You will deposit $5000 into a retirement account that earns 3% interest compounded annually. You hope to retire in 25 years so you are depositing an additional $500 to the account each year. What is the future value? What are the total payments (additional deposits)? What will be the total interest paid to you?

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You want to be able to withdraw $35,000 from your account each year for 20 years after you retire. You expect to retire in 15 years. If your account earns 10% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?