You wish to have a pension of $100,000 a year for 25 years. How much money must you have saved if you can earn 8% interest compounded annually to make your wish a reality. The first payment occurs one year from now? O a Ob $1,128,433.33 $1,067,477.62 Oc $1,487,320.09 Od $1,250,000.00
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- 8) Special Retirement PlanYou set up a retirement plan where you will invest $20,000 per year in an account with a guaranteed rate of return of ? = 0.05. The plan requires that you start investing immediately at year t=0, and make fifteen (15) additional payments of $20,000 in years t=1, t=2, ..., t=10. You make 11 investments in total. a. What will be the value of this stream of investments in year t=50? b. What is the maximum you can withdraw per year over the twenty (20) year period from t=51, t=52, ..., t=70? You have to withdraw the same amount each year. c. What is the maximum that you can withdraw per year forever if you start to make withdrawals in year t=51. You have to withdraw the same amount each year. 19)Give only typing answer with explanation and conclusion To supplement your retirement, you estimate that you need to accumulate $320,000 exactly 40 years from today. You plan to make equal, end-of-year deposits into an account paying 6% annual interest. a. How large must the annual deposits be to create the $320,000 fund by the end of 40 years? b. If you can afford to deposit only $1,740 per year into the account, how much will you have accumulated in 40 years?Through your career, you have saved-up $1,150,000. You are now ready to retire. You discuss your plans with your bank's financial adviser. He informs you that you can establish an annuity that will pay $68,000 per year for 25 years. What is the implied rate the bank is offering? O 3.58% ○ 2.75% O 3.26% ○ 3.40%
- After retirement, you expect to live for 25 years. You would like to have $90,000 in income each year. How much should you have saved in your retirement account to receive this income if the annual interest rate is 9 percent per year? (Assume that the payments start one year after your retirement.) Multiple Choice $884,032.16 $99.986.08 $2,250,000.00 $1,456,153.94Many assets provide a series of cash inflows over time; and many obligations require a series of payments. When the payments are equal and are made at fixed intervals, the series is an annuity. There are three types of annuities: (1) Ordinary (deferred) annuity, (2) Annuity due, and (3) Growing annuity. One can find a annuity's future and present values, the interest rate built into annuity contracts, and the length of time it takes to reach a financial goal using an annuity. Growing annuities are often used in the area of financial planning. Their analysis is more complex and often easier solved using a financial spreadsheet, so we will limit our discussion here to the first two types of annuities. The future value of an ordinary annuity, FVAN, is the total amount one would have at the end of the annuity period if each payment (PMT) were invested at a given interest rate and held to the end of the annuity period. The equation is: Each payment of an annuity due is compounded for one…A new investment opportunity for you is an annuity that pays $650 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? Select the correct answer. a. $1,903.81 b. $1,885.91 c. $1,850.11 d. $1,832.21 e. $1,868.01
- How do you solve this on TI 84 Future Value of Multiple Annuities Assume that you contribute $110 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $210 per month for another 20 years. Given a 6.5 percent interest rate, what is the value of your retirement plan after 40 years?Acme Insurance is offering you a perpetuity that will pay you and your heirs $150,000 per year. If you have a required return of 7.5%, what is the most you would pay for this perpetuity? Question 5 options: $2,000,000 $1,000,000 $750,000 $1,750,000 $1,500,000 Previous PageNext PageSuppose you deposited $39,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days? Select the correct answer. O a. $40,389.07 O b. $40,375.67 O c. $40,402.47 d. $40,368.97 Oe. $40,382.37
- Part A: By the end of this year, you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement, you wish to have an annual sum of $50,000 to supplement your social security benefits. Therefore, you opened now your retirement account with a 7% annual interest rate. At retirement, you liquidate your account and use the funds to buy an investment-grade bond which makes $50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement years. How much will the face value of the bond that you will be investing? Please calculate the monthly payment in your retirement account in order to be able to achieve the plan mentioned above? How much will your inheritors receive?Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment? Group of answer choices $201,000 $175,590 $225,682 $ 49,179 $250,000You plan to invest $19,000 per year into a retirement account. If you earn a compound annual rate of return of 8%, how many years will it take you to reach a balance of $1,000,000? Question 10 options: 18.98 22.26 20.16 17.54 21.45