Question

You are trying to decide how much to save for retirement. Assume you plan to save...

You are trying to decide how much to save for retirement. Assume you plan to save

$ 5 comma 000$5,000

per year with the first investment made one year from now. You think you can earn

7.07.0​%

per year on your investments and you plan to retire in  

2727

​years, immediately after making your last

$ 5 comma 000$5,000

investment.

a. How much will you have in your retirement account on the day you​ retire?

b.​ If, instead of investing

$ 5 comma 000$5,000

per​ year, you wanted to make one​ lump-sum investment today for your retirement that will result in the same retirement​ saving, how much would that lump sum need to​ be?

c. If you hope to live for

2424

years in​ retirement, how much can you withdraw every year in retirement​ (starting one year after​ retirement) so that you will just exhaust your savings with the

2424th

withdrawal​ (assume your savings will continue to earn

7.07.0​%

in​ retirement)?

d.​ If, instead, you decide to withdraw

$ 74 comma 000$74,000

per year in retirement​ (again with the first withdrawal one year after​ retiring), how many years will it take until you exhaust your​ savings? (Use​ trial-and-error, a financial​ calculator: solve for​ "N", or​ Excel: function​ NPER)

e. Assuming the most you can afford to save is

$ 1 comma 000$1,000

per​ year, but you want to retire with

$ 1 comma 000 comma 000$1,000,000

in your investment​ account, how high of a return do you need to earn on your​ investments? (Use​ trial-and-error, a financial​ calculator: solve for the interest​ rate, or​ Excel: function​ RATE)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $ 5000 per year with the first investment made one year from now. You think you can earn 11.5​% per year on your investments and you plan to retire in 34​years, immediately after making your last $ 5000 investment. a. How much will you have in your retirement account on the day you​ retire? b.​ If, instead of investing $5,000 per​ year, you wanted...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 8.0​% per year on your investments and you plan to retire in 34 ​years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you​ retire? b. ​ If, instead of investing $4,000 per​ year, you wanted...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $6,000 per year with the first investment made one year from now. You think you can earn 11.0​% per year on your investments and you plan to retire in 28 ​years, immediately after making your last $6,000 investment. a. How much will you have in your retirement account on the day you​ retire? b.​ If, instead of investing $6,000 per​ year, you wanted to...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $7,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 26 years, immediately after making your last $7,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $7,000 per year, you wanted to...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 10% per year on your investments and you plan to retire in 43 years, immediately after making your last $5,000 investment. Please show how to solve on Excel. a. How much will you have in your retirement account on the day you retire? b. If, instead of...
2) You are trying to decide how much to save for retirement. Assume you plan to...
2) You are trying to decide how much to save for retirement. Assume you plan to save $7,500 per year with the first investment made one year from now. You think you can earn 9.0​% per year on your investments and you plan to retire in 39 ​years, immediately after making your last $7,500 investment. a. How much will you have in your retirement account on the day you​ retire? b.​ If, instead of investing $7,500 per​ year, you wanted...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $ 5,500 per year with the first investment made one year from now. You think you can earn 12.0​% per year on your investments and you plan to retire in 38 ​years, immediately after making your last 5,500 investment. a. How much will you have in your retirement account on the day you​ retire? b.​ If, instead of investing $5,500 per​ year, you wanted...
Michael plans to retire in 40 years. He is now trying to decide how much to...
Michael plans to retire in 40 years. He is now trying to decide how much to save for his retirement. He plans to deposit equal amount at the beginning of each month in a retirement account for 40 years, with his first saving made today. Assume the retirement account pays him an interest rate of 6.6% p.a., compounded monthly and Michael would like to have $2,000,000 in his retirement account 40 years later a)  How much will he have to deposit...
You are 2424 years old and decide to start saving for your retirement. You plan to...
You are 2424 years old and decide to start saving for your retirement. You plan to save $ 6 comma 500$6,500 at the end of each year​ (so the first deposit will be one year from​ now), and will make the last deposit when you retire at age 6767. Suppose you earn 11 %11% per year on your retirement savings. a. How much will you have saved for​ retirement? b. How much will you have saved if you wait until...
How much will you have to save each month until retirement if you want to retire...
How much will you have to save each month until retirement if you want to retire in 35 years and withdraw $350,000 per year for 25 years during retirement and expect to earn 11% until retirement and 6% during retirement? A. $4,685 B. $908 C. $2,135 D. $719