Question

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)

Answer #1

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 34years,
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 $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 $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 $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...

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 $ 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 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
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 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

You are trying to calculate how much money you should have at
retirement. On your 57 th birthday you will retire and immediately
make your first withdrawal of ?$4166.67. You plan to make 24 such
withdrawals each year. You plan to continue withdrawing at that
level and frequency until you are 72 years old. ? (Assume beginning
of period withdrawals with the first withdrawal on your retirement
date and no withdrawal on your final? birthday.) During retirement
your savings will...

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