Your company sponsors a 401(k) plan into which you deposit 10 percent of your $132,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 10 percent next year. Assume you are currently in the 31 percent tax bracket. a. What is your annual investment in the 401(k) plan? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 3 decimal places. (e.g., 32.161))

Your company sponsors a 401(k) plan into which you deposit 10 percent of your $132,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 10 percent next year. Assume you are currently in the 31 percent tax bracket. a. What is your annual investment in the 401(k) plan? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 3 decimal places. (e.g., 32.161))

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 deposit the following at the end of each year into a growth mutualfund that earns 11 percent per year:Year Deposit ($)1 4,0002 3,5003 2,5004 2,0005 1,700 ======== $13,700a. How much should the fund be worth at the end of 5 years?b. How much interest have you earned in total?
Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36 A car dealer offers payment of $525.32 per months for 60 months on a $30,000 car after making a $5000 down payment. What's the loan's APR? a. 10.4798% b. 9.5224% c. 1.9609% d. 0.7935%
Suppose you have estimated that you will need $2,500 per month in your retirement to meet your expenses and live comfortably, and that you have found or chosen a fund (account) which pays monthly interest 4% APR . What principal, or balance, will your account need to maintain in order to be able to pay you this amount each month? Round/take your answer to the nearest cent.
Assume that your uncle starts an account for you in a mutual fund with an initial deposit of $790 today. He also makes $790 deposits at the end of each of year 1 and the end of year 2 (i.e. three deposits in all). After the third deposit, he will make no more contributions . Assuming the fund averages a 7.0% p.a. return , what will the balance in the account be at the end of the 6th year? Record your answer as a dollar amount , rounded to two decimal places , but do not include a dollar sign or any commas in your answer . For example , enter $ 18,232.36987 as 18232.37 .
You begin saving for your retirement by investing $500, matched by your employer with $300 at the end of each month in your 401K account (or IRA). Assume your investment returns 10% per year. • How much will you have in 40 years when you retire?
Please help me with this question :) A detailed answer will be much appreciated.
Suppose you are planning for retirement. At thebeginning of this year and each of the next 39 years,you plan to contribute some money to your retirementfund. Each year, you plan to increase your retirement contribution by $500. When you retire in 40years, you plan to withdraw $100,000 at the beginning of each year for the next 20 years. You assumethe following about the yields of your retirementinvestment portfolio:■ During the first 20 years, your investments willearn 10% per year.■ During all other years, your investments will earn5% per year.All contributions and withdrawals occur at thebeginnings of the respective years.a. Given these assumptions, what is the least amountof money you can contribute this year and stillhave enough to make your retirement withdrawals?b. How does your answer change if inflation is 2%per year and your goal is to withdraw $100,000 peryear (in today’s dollars) for 20 years?
Suppose that you have an opportunity to invest in a fund that pays 12% interest compoundedannually. Today, you invest P10,000 into this fund. Three years later, you borrow P5,000 from alocal bank at 10% effective annual interest and invest it in the fund. Two years later, you withdrawenough money from the fund to repay the bank loan and all interest due on it. Three years laterfrom this withdrawal you start taking P2,000 per year for 5 years out of the fund. After 5 years, youhave withdrawn your original P10,000. The amount remaining in the fund is earned interest. Howmuch remains?
NOTE: Provide a format and show your work (example: N = 6, PV = XXX, I = X%, etc.) It is now the year 2048 and you have amassed a retirement fund of $1.2 million. You want to retire in 13 years (year 2061). At the time, you plan to start withdrawing $20,000 per month.If your investment fund is invested at a 6.0 percent rate, how many months will it last you once you start to withdraw the money? (Assume monthly compounding. Do not round intermediate calculations and round your final answer to 2 decimal places.) Hint: draw a timeline to help visualize the problem.
Today, you invest a lump sum amount in an equity fund that provides an 12% annual return. You would like to have $10,900 in 6 years to help with a down payment for a home. How much do you need to deposit today to reach your $10,900 goal? Do not round intermediate calculations. Round your answer to the nearest cent.
4) Ashley deposits $500 into an investment fund each January 1 starting in 2005 and continuing to 2014 inclusive. If the fund has an average annual growth rate of ji = 10%, how much will be in her account on January 1, 2019?
Suppose you inherit $100,000 at age 25 and immediately invested in a growth fund who’s annual rate of return average is 13%. Five years later, you transfer all proceeds from the scrubs fun into a long-term IRA that pays an average annual rate of 8%. Immediately you start making additional contributions of $7000 per year to the same IRA. Assuming continuous interest, steady interest rates, and a perfect record of making annualcontributions, how much is this IRA worth when you reach the age of 65? The formula that will need to be used is A = P e^r*t + D/r (e^r*t - 1). Hint: use the continuous interest formula to find the accumulated amount for the first five years, which is then the annual investment, P, into the IRA.

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