Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants afixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of hisretirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today,at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $205,000saved, and he expects to earn 10% annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar.$

Annual fixed value of retirement payment=present value(1+inflation rate)^n…

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from tod at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $205,000 saved, and he expects to earn 10% annually on his savings. How much must he save during each of the next 10 years (end-of- year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar. $

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from tod at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $205,000 saved, and he expects to earn 10% annually on his savings. How much must he save during each of the next 10 years (end-of- year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar. $

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

Marco is plans to retire in 18 years. He wants you to assume he will be retired for 15 years before he dies. You calculated that Marco needs $1,760,621 as a lump sum at the beginning of retirement. Use an investment return of 5 percent and an inflation assumption of 3.3 percent. How much money will he need to save monthly to have this amount when he begins retirement? (Round the final answer to 2 decimal places)
4. Amy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she retires. She estimates that she will be able to earn an interest rate of 10.1%, compounded annually, throughout her lifetime. To reach her retirement goal, Amy will make annual contributions to her account for the next 30 years. One year after making her last deposit, she will receive her first retirement check. How large must her yearly contribution be?
Mr. Mangano is considering taking early retirement, having saved $400,000. Mr. Mangano wishes to determine how many years the saving will last if he withdraws $60,000 per year at the end of each year. Mr.Mangano's savings can earn 10 percent per year. 11.67 years. 11.35 years 10.90 years 11.53 years. 12.01 years
Una Day is planning to retire in 14 years, at which time she hopes to have accumulated enough money to receive an annuity of $17,000 a year for 19 years of retirement. During her pre-retirement period she expects to earn 8 percent annually, while during retirement she expects to earn 10 percent annually on her money. What annual contributions to this retirement fund are required for Una to achieve her objective and sleep well at night? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Annual contribution $ 7,422 x
Mary wants to retire in 37 years with $1 million in her retirement account. To that end she decides to save money every year in a savings plan that pays 11.3 percent annually. Her first contribution will occur at the end of the year (one year from today). She needs to save $__________ each year to the savings plan. Round it to two decimal places and do not include the $ sign, e.g., 1234.56.
Una Day is planning to retire in 11 years, at which time she hopes to have accumulated enough money to receive an annuity of $21,000 a year for 16 years of retirement. During her pre-retirement period she expects to earn 12 percent annually, while during retirement she expects to earn 14 percent annually on her money. What annual contributions to this retirement fund are required for Una to achieve her objective and sleep well at night? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Annual contribution $
Aji who is now 25 years old, wants to buy a retirement plan starting at the age of 55 year with an income of $3,000,000 per year, where the first payment is made on his 55th birthday. For that he will make annual payments at the beginning of the year starting now and ending on his birthday 54th year. Calculate the amount of the annual payment!Return rate 7%
Oscar is looking forward to retirement in a few years when he will have completed 20 years of pensionable service. Oscar's pension plan provides an annual pension benefit of 1.5% of average career earnings for each year of pensionable service. Using information from Oscar's pension statements, he estimates his career average annual earnings will be $50,000 when he retires with 20 years of service. Given these assumptions, calculate Oscar's annual pension benefit that he can expect to receive when he retires. $7,500 $10,000 $15,000 $20,000
Spencer plans to work for 45 years. He also plans to spend $250,000 per year during his 40 years of retirement. If Spencer gets paid every other week, how much of each paycheck does he need to save, in order to live this lifestyle during retirement? Assume his retirement account earns an APR of 10% compounded monthly and that he will have no money left after 40 years of retirement.
Your best friend Mary is in discussion with you about saving for her retirement. You are to advise her on how much she should deposit annually to meet her retirement needs. Assume that she will deposit a fixed annual amount for the next 20 years into a retirement savings account, starting one year from now. Mary has a daughter who will be attending college and plans to make 5 withdrawals (starting one year after making her final deposit into the retirement account) of $35,000 each to pay for her annual tuition for the following 5 years. Commercial Banks will be paying 6 percent on such retirement accounts for the next 25 years. Kindly advise Mary on how much she should place in the account annually to cover her retirement needs.

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