Your pension plan is an annuity with a guaranteed return of 5.8% per year (compounded quarterly). You can afford to put $1,500 per quarter into the fund, and you will workfor 38 years before retiring. After you retire, you will be paid a quarterly pension based on a 25-year payout.How much will you receive each quarter? (Round your final answer to the nearest dollar.)Type your answer...

To solve this problem, we need to break it down into two main parts:1. Accumulation Phase (Before…

Answered: Your pension plan is an annuity with a…

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

Assume that Social Security promises you $43,000 per year starting when you retire 45 years from today (the first $43,000 will get paid 45 years from now). If your discount rate is 5%, compounded annually, and you plan to live for 17 years after retiring (so that you will receive a total of 18 payments including the first one), what is the value today of Social Security's promise? ... The value today of Social Security's promise is $ the nearest cent.) (Round to
You are offered an annuity that will pay $5,420 per quarter for 8 years (first payment made today). If you feel that the appropriate discount rate is 13%, what is the annuity worth to you today?
You are offered an annuity that will pay $5,420 per quarter for 8 years (first payment made today). If you feel that the appropriate discount rate is 13%, what is the annuity worth to you today?
Mick Mitchell wishes to have $120,000 in seven years. If he can earn annual interest of 12%, how much must he invest today? Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of S1 table.) (Click the icon to view Present Value of S1 table.) (Click the icon to view Future Value of S1 table.) OA. $265,320 В. $1,210 OC $54,240 OD. S111,960
you want to establish an annuity that will pay $7,500 for the next twenty years (end year) your financial institution will establish such an annuity if you deposit $104,000 today. what is the implied rate that the institution is paying on this annuity?
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.
You MUST use the TI BA II calculator features (N, I/Y, PV, PMT, FV, AMORT) to solve questions whenever possible. 1. Seanna O'Brien receives pension payments of $3,200 at the end of every six months from a retirement fund of $50,000. The fund earns 7% compounded semi-annually. What is the size of the final pension payment? 2. For how many years will Prasad make payments on the $28,000 he borrowed to start his machine shop if he makes payments of $3,400 at the end of every three months and interest is 8.08% compounded semi-annually?
You build a retirement fund by continuously paying into the fund for 30 years, at a rate of 5,000 per year at an effective annual interest rate of 9%. After 30 years, you buy a 30-year annuity immediate with your fund at an effective annual interest rate of 8%. The annuity pays P after one year, and payments increase by 5% thereafter. Find P
Mr. Chew, a retiree, expects to live for the next 20 years and would like to receive a regular retirement income by purchasing an immediate annuity. His desired retirement income is $24,000 per year. The regular pay out is paid immediately on purchase of the annuity. The projected rate of return of the annuity product is 2.5%. To purchase the annuity today, how much Mr Chew would require a lump sum of?
Suppose a man retires at age 65, and in addition to Social Security, he needs $2200 per month in income. Based on an expected lifetime of 204 more months, how much would he have to invest in a life income annuity earning 4% APR to pay that much per year? (Round your answer to two decimal places.)
You plan to retire in 40 years. To provide for your retirement, you initiate a savings program of $4,200 per year yielding 7 percent. What will be the value of the retirement fund after 40 years? Round your answer to nearest whole dollar.
Assume that Social Security promises you $47,000 per year starting when you retire 45 years from today (the first $47,000 will get paid 45 years from now). If your discount rate is 6%, compounded annually, and you plan to live for 12 years after retiring (so that you will receive a total of 13 payments including the first one), what is the value today of Social Security's promise? The value today of Social Security's promise is $ (Round to the nearest cent.)

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