Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information: • Years until retirement: 30 • Amount to withdraw each year in retirement: $120,000 • Years to withdraw in retirement: 12 . Interest rate while saving: 9% • Interest rate in retirement: 6% • Saved today (nest egg): $25,000 The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not occur until one year after she retires, and she plans to spend her entire nest egg. Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum deposit today to cover her retirement needs. She plans to spend what she has currently saved today on a new car. Calculate the amount she must deposit today to reach her retirement goal. (Round to 2 decimals)

Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information: • Years until retirement: 30 • Amount to withdraw each year in retirement: $120,000 • Years to withdraw in retirement: 12 . Interest rate while saving: 9% • Interest rate in retirement: 6% • Saved today (nest egg): $25,000 The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not occur until one year after she retires, and she plans to spend her entire nest egg. Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum deposit today to cover her retirement needs. She plans to spend what she has currently saved today on a new car. Calculate the amount she must deposit today to reach her retirement goal. (Round to 2 decimals)

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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You have a unique account in your local bank If you deposit $7,000 today, the bank will pay you an annual interest rate of 5.5 percent for 4 years, 6.5 percent for 3 years, and 7 percent for 7 years How much will you have in your account is 14 years? Answer is: Dollars
You will make equal deposits into your retirement account each year for 10 years starting now (i.e., years 0–9). If you expect to withdraw $50,000 per year forever beginning 30 years from now, and the funds will earn interest at 10% per year, the size of the 10 deposits is nearest: (a) $4239 (b) $4662 (c) $4974 (d) $5471
2. (From section 6.2) You want to be able to withdraw $50,100 from your account each year for 20 years after you retire. You expect to retire in 35 years. If your investment account earns 5.5% interest, how much will you need to deposit into the account at the end of each year until you reach retirement to achieve your retirement goals? (a) The first part is finding how much we need to have in the account by the time we retire. Which formula will you use first? Circle one. Annuity Payout-Annuity (b) What are the following variables that we will need for the formula? PMT = n = t = r = A or Po = (c) Write the formula you will use with the numbers plugged in below. (d) Solve using your calculator or technology and round to two decimal places. Work is not required here. Write the answer here and state which variable you solved for. (e) Using your own words, describe what you found by solving the equation in terms of the word problem given.
Hi, How do I solve for the 2 annuities in this question? Thanks
Your local bank is offering a new type of retirement savings account. An initial deposit is made to the account when it is opened. This money and any accumulated interest must be left in the account for 28 years. No additional deposits can be made. On the day the account is opened and on each annual anniversary of the initial deposit, the account balance is reviewed and the following terms apply: 1. If the account balance is less than or equal to $20,000, interest for the next annual period is 7 %/year compounded annually. 2. If the account balance is greater than $20,000 but less than or equal to $40,000, interest for the next annual period is 10%/year compounded quarterly. 3. If the account balance is greater than $40,000, interest for the next annual period is 12%/year compounded monthly. You decide to open an account under these terms today with $9,400. How much money will you withdraw when the account is closed 28 years from today? $
You just inherited some money, and you decide to put $70,000 in an account that pays 3.25% interest, which you will use to establish an annuity that will pay for your vacations for the next ten years. How much can you withdraw from the account in each of the ten years? $8,044.56 $7,826.10 $6,241.51 $8,311.18
A person wants to withdraw $1000 every month, for 21 years, to supplement their pension check when they retire. a. How much money must be in an account that pays 7% interest compounded monthly, in order to meet their needs? b. How much money must be deposited into an account that pays 6.6% interest compounded monthly in order to achieve this amount? The monthly deposits will be made for 45 years C. How much money was actually deposited in to the account? d. How much money will actually be paid out from this account?
Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of each of his biweekly checks; it will earn 9 7/8% interest. He just had his twenty-ninth birthday, and his ordinary annuity comes to term when he is 65. Find the following. (a) The future value of the account$ (b) Dick's total contribution to the account$ (c) The total interest$
A trustworthy friend asks to borrow money from you today. She promises to pay you exactly $3750 in 2 years, and she insists on your earning the same interest rate on your loan to her as you would have earned keeping your money in your savings account that earns 1 %. How much can you lend her today?
You plan to prepare for retirement by making monthly contributions $1,500 to a savings account that pays 10% interest per year, compounded continuously. 4. Determine the accumulated savings in this account after 30-year (360-month) investment. The accumulated savings in Part (a) will be used to provide a monthly annuity for the next 10 years after 30-year investment. What is the amount of the annuity if the interest rate and compounding frequency do not change? (a) (b)
Direction : Read , analyze , and solve the following worded problem involving annuities . Show your complete solutions. I already provided the answer I just need the SOLUTION. Your mother's savings may allow you to withdraw 50 000, 00 Php semi - annually for 5 years starting at the end of 5 years. How much is your mother's savings if the interest rate 8% converted semi annually ? Answer: Your mother's savings is amounting to 284 930.09 Php
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $60,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 6.6% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday?

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