Question

Suppose Rachel wishes to retire fifty years from today. She needs $8,000 per month once she retires, with the first retirement funds withdrawn one month from the day Rachel retires. Rachel estimates that she will earn effective annual rate of 3.66% on her retirement funds. Rachel also believes she will need funds up and including her 40th birthday after retirement. How much must she deposit each year in her retirement funds, so that she has enough funds for retirement?

Answer #1

Suppose you wish to retire forty years from today. You determine
that you need $40,000 per year once you retire, with the first
retirement funds withdrawn one year from the day you retire. You
estimate that you will earn 6% per year on your retirement funds
during retirement and 10% while working; and that you will need
funds up to and including your 25th birthday after retirement. How
much must you deposit in an account today so that you have...

Neha would retire 30 years from today and she would need ₹
6,00,000 per year after her retirement, with the first retirement
funds withdrawn one year from the day she retires. Assume a return
of 7% per annum on her retirement funds and if her planning is for
25 years after retirement, Calculate:
a. How much lumpsum she should deposit in her account today so
that she has enough funds for retirement?
b. How much she should deposit each year...

Marie just turned 28 and are now seriously planning for her
retirement. Marie wishes to retire two years earlier than the
mandatory retirement age of 65. She hopes to be able to make
end-of-month withdrawals from her retirement account of $25,000 per
month for a 30-year period after that.
Marie's plan is to fund her retirement by making monthly
deposits between now and when she retires. The initial monthly
deposit will be made at the end of the coming month....

You just celebrated your 40th birthday. You plan to
retire when you turn 65. Today you have $105,736.62 accumulated in
your retirement plan and plan to continue adding money each month
to your retirement plan for exactly 25 years, starting one month
from now. When you retire you will receive a $40,000 retirement
bonus from your employer and will immediately deposit the money
into your retirement plan. You will then use the accumulated funds
to purchase an annuity that will...

Chelsea will retire in fifteen years. Once she is
retired, she will live for 20 years and need 50,000 per year to
cover her expenses (from the end of year 16 through 35). When she
retires in 15 years, she will sell her house for 800,000 and buy a
condominium for 600,000. She currently has 60,000 in savings and
the discount rate is 3%.
A) Between the end of this year and the end of year 15, how much
does...

Betty plans to begin saving one year from today. She will
contribute $12,000 per year for 35 years and estimates that he can
earn an annual rate of 6% on his savings. How much does she expect
to have in 35 years?
$1,325,217
$1,337,217
$1,424,710
$1,471,437
None of the above
Tam needs $4,000,000 when you retire in 40 years and can earn 8%
on all invested funds. She will start contributing to your
retirement account in a month. How much...

Mary turned 20 today. She has decided to begin an
annuity account to prepare for her future. She can
afford to put $50/month in the investment. The account
returns 7% annual interest. She hopes she will be able
to keep the account until she retires at 65. If she
retires on her birthday, how much money will she have from the
annuity for her retirement?
Ashley, Mary’s twin sister, thinks she is nuts. She
has 45 years to worry about that. Then, when Ashley
turned 45, she...

Sofia just graduated from college and she is starting her new
job today. Her new employer gave her a $15,000 signing bonus that
she will invest today. She plans to retire 50 years from today
(i.e., at the end of year 50). Once she retires, she would like to
be able to withdraw from her retirement account $180,000 at the end
of each year, starting the year after she retires (i.e., year 51).
She expects that her retirement will last...

Sofia just graduated from college and she is starting her new
job today. Her new employer gave her a $15,000 signing bonus that
she will invest today. She plans to retire 50 years from today
(i.e., at the end of year 50). Once she retires, she would like to
be able to withdraw from her retirement account $180,000 at the end
of each year, starting the year after she retires (i.e., year 51).
She expects that her retirement will last...

Jordan, age 46, currently makes $143,000. She expects that
inflation will average 2.75 percent for her entire life expectancy.
She expects to earn 8.5 percent on her investments and retire at
age 65 and live to age 92. She has sent for and received her Social
Security benefit statement, which indicated that her Social
Security retirement benefit in today’s dollars adjusted for early
retirement is $20,000 per year. It is reasonable to subtract the
Social Security benefit from today’s needs...

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