Question

David currently has $15,000 saved for retirement. For 10 years, he makes no additional contributions to...

David currently has $15,000 saved for retirement. For 10 years, he makes no additional contributions to any of his retirement accounts. Then, after this 10 year time period, he begins contributing $750 per month. Assume David can earn 8% on his money, and that interest is compounded monthly.

a. How much will David have saved for retirement after 20 years?

b. Assume the same facts. If David decided to begin saving right away (rather than wait 10 years), how much money would he have to contribute each month to accumulate the same amount of money as in part a above?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Bob needs to replace an income stream of $55,000 for 20 years during retirement. He assumes...
Bob needs to replace an income stream of $55,000 for 20 years during retirement. He assumes inflation will be 3% and he can earn 5% on his investments during retirement. If he begins saving money at age 22 and retires when he is 65, he can earn 10% annually, how much will he need to contribute monthly to meet his goal?
Tom currently has $50,000 in savings intended for his retirement in 10 years. He expects to...
Tom currently has $50,000 in savings intended for his retirement in 10 years. He expects to live for 15 years post-retirement and he would like to withdraw $110,000 at the end of each of his retirement years. If he can invest his money in an account that pays 10%, compounded annually, how much does he need to contribute to his account every year to ensure he meets his retirement goals? Question 28 options: $95,392.63 $65,884.09 $60,634.38 $49,609.55 $44,359.84
Sam is just starting his career and wants to begin saving for retirement. Sam estimates he...
Sam is just starting his career and wants to begin saving for retirement. Sam estimates he will need to withdrawal $8000/month to live comfortably while retired and based on life expectancy this would last for 25 years. If he begins saving in 2020 and makes annual contributions growing at 4%, how much will he need to make his first contribution to reach his retirement goal by 2060? Sam’s retirement investments are expected to earn a 9% return (both before AND...
Tim has nothing saved for retirement. He wants to receive $57000 per year for six years...
Tim has nothing saved for retirement. He wants to receive $57000 per year for six years during retirement. The first of these payments will be received in four years. He can earn 14.70 percent per year. How much does he need to save each year for four years to have exactly enough to meet his retirement goal if he makes his first contribution to savings in one year from today and all savings contributions are equal?
Ross has decided that he wants to build enough retirement wealth that, if invested at 6%...
Ross has decided that he wants to build enough retirement wealth that, if invested at 6% per year, will provide him with $3,700 of monthly income for 25 years. To date, he has nothing saved, but he still had 15 years until he retires. How much money does he need to contribute per month to reach his goal? First compute how much money he will need at retirement, then the monthly contribute to reach that goal. Round final answer 2...
*Please show a detailed step-by-step solution using EXCEL* David Jone’s estimated net wealth is $15,000, and...
*Please show a detailed step-by-step solution using EXCEL* David Jone’s estimated net wealth is $15,000, and he intends to retire in ten years. His annual salary after tax is $40,000 and current expenditure is $28,000, allowing him to save $12,000 per annum (Assume that this money is saved at the end of the year). His pension fund advisor tells him that the actuarial evidence suggests he should plan on an expected life of 16 years following retirement. If the rate...
Daryl wishes to save money to provide for his retirement. He is now 30 years old...
Daryl wishes to save money to provide for his retirement. He is now 30 years old and will be retiring at age 64. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 12% compounded monthly. Then one year after making his final deposit, he will withdraw $100,000 annually for 25 years. In addition, and after he passes away (assuming he lives 25 years after retirement) he wishes to leave...
Daryl wishes to save money to provide for his retirement. He is now 30 years old...
Daryl wishes to save money to provide for his retirement. He is now 30 years old and will be retiring at age 64. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 12% compounded monthly. Then one year after making his final deposit, he will withdraw $100,000 annually for 25 years. In addition, and after he passes away (assuming he lives 25 years after retirement) he wishes to leave...
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...
Your father is 50 years old and will retire in 10 years. He expects to live...
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 $40,000 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 today, at which time he will receive 24...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT