You would like to start saving for retirement. Assuming you are now 20 years old and you want toretire at age 50, you have 30 years to watch your investment grow. You decide to invest in the stockmarket, which has earned about 8% per year over the past 80 years and is expected to continue atthis rate. You decide to invest $1,000 at the end of each year for the next 30 years.Required:Calculate how much your accumulated investment is expected to be in 30 years.

Future Value of Annuity = Amount * (((1 +Rate of Interest)N-1 )/Rate of Interest)Where,Amount =…

Answered: You would like to start saving for…

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

You purchase an investment for $1,000. You expect it will increase in value at a rate of 9% per year. If your expectations are correct, how much will your investment be worth at the end of 12 years? Your Answer:
An investor plans to invest $500 a year and expects to get a 10.5% return. If the investor makes these contributions at the end of the next 20 years, what is the present value of this investment today?
You are 19 years old today. You want to have $381,507.06 in an investment account when you are 60 years old. You will start with an initial deposit in one year from now and grow it by 3% per year for a total of 15 investments. How much is the amount of that initial deposit? Assume an interest rate (a.k.a. return on your investment of 6%. Use the $ sign and a comma and round to the nearest thousand...(e.g. $8,000 would be the form of a correct answer). Hint..the correct answer should be very close to a multiple of $1,000. Previous Page Next Page Page 16 of 19
Assume you want to retire in 35 years and save a $15,000 at the end of the first year. Assume you will earn 7% annually on your investment and you expect 2% inflation before retirement. After you retired, you expect to live for another 30 years. Assume you can earn a nominal annual rate of 4% and you expect inflation to be 3% during retirement. a) Calculate how much money you are accumulating by the time you retire if you increase your annual savings by the inflation rate. b) Calculate your real annual withdrawals over the next 30 years so as to maintain a constant standard of living. Assume the first withdrawal is made at the beginning of the year. Please do this in excel and show the cell references
You are planning to save for retirement over the next 25 years. To do this, you will invest $1,200 a month in a stock account and $900 a month in a bond account. The return of the stock account is expected to be 7 percent, and the bond account will pay 4 percent. When you retire, you will combine your money into an account with a return of 5 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period? Multiple Choice $621,766.96 $9,279.68 $9.469.06 $9,658.44 $113,628.75
None
You want to save for retirement. Assuming you are now 25 years old and you want to retire at age 55, you have 30 years to watch your investment grow. You decide to invest in the stock market, which has earned about 13% per year over the past 80 years and is expected to continue at this rate. You decide to invest $2,000 today. Required: How much do you expect to have in 30 years? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.) Future value
You are planning to save for retirement over the next 30 years. To do this, you will invest $1,300 a month in a stock account and $1,000 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 5 percent. When you retire, you will combine your money into an account with a return of 7 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period? Multiple Choice $1,102,254.13 $34.571.73
You plan to retire in 20 years. You would like to maintain your current level of consumption which is $55,937 per year. You will need to have 38 years of consumption during your retirement. You can earn 5.52% per year (nominal terms) on your investments. In addition, you expect inflation to be 2.09% inflation per year, from now and through your retirement. How much do you have to invest each year, starting next year, for 13 years, in nominal terms to just cover your retirement needs?
And investor plans to invest $500 a year and expect to get a 10.5% return if the investor makes these contributions at the end of the next 20 years what is the present value of this investment today
You are currently 25 years old and landed your first job. Your retirement plan will make monthly contributions for $1,000 for the next 40 years. Assume your portfolio puts $600 into the S&P 500 which receives an average 12% annual return and $400 into a bond fund which will give a 8% annual return. If you retire at 65 and plan to live until you’re 90, what can you withdraw monthly assuming a risk-free rate of 4%?
Assume you can earn 9.4% per year on your investments. a. If you invest $170,000 for retirement at age 30, how much will you have 35 years later for retirement? b. If you wait until age 40 to invest the $170,000, how much will you have 25 years later for retirement? c. Why is the difference so large? a. If you invest $170,000 for retirement at age 30, how much will you have 35 years later for retirement? The future value is $ (Round to the nearest dollar)

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