Question

A year from now, you plan to begin saving for your retirement by depositing $20,000 into...

A year from now, you plan to begin saving for your retirement by depositing $20,000 into a new savings account that has an expected return of 5.75% compounded monthly. You plan to continue depositing the same amount each year until you retire in 35 years. You expect to make withdrawals from your savings account every month for 40 years after you retire. Assume you were asked to find the amount you will be able to withdraw each month from your savings account during your retirement. In your solution, you would need to find the future value of your savings account at your retirement date by using the annuity future value equation. What interest rate would you use in this equation?

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
A week from now, you plan to begin saving for your retirement by depositing $200 into...
A week from now, you plan to begin saving for your retirement by depositing $200 into a new savings account that has an expected return of 7.75% compounded monthly. You plan to continue depositing the same amount each week until you retire in 40 years. You expect to make withdrawals from your savings account every year for 35 years after you retire. Assume you were asked to find the amount you will be able to withdraw each year from your...
A year from now, you plan to begin saving for your retirement by making a deposit...
A year from now, you plan to begin saving for your retirement by making a deposit into a new savings account that has an expected return of 7.5% compounded monthly. You plan to continue depositing the same amount each year until you retire in 30 years. You expect to make withdrawals in the amount of $200 from your savings account every week for 45 years after you retire. Assume you were asked to find the amount you will need to...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. The day you retire you will buy an RV for $240,000. You will begin to make withdrawals from the account the first month after you retire. If you plan to live an addition 25 years,...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. (Note: you make 361 total monthly deposits into your retirement account.) You will begin to make withdrawals from the account the first month after you retire. If you plan to live an addition 25 years...
In one year your wealthy younger sister will begin depositing $5,000 each year into a savings...
In one year your wealthy younger sister will begin depositing $5,000 each year into a savings account for your retirement. The account will compound interest at 5 percent annually and you can't withdraw any money from the account until you retire in 40 years. Which of the following statements is correct? A. The total amount of interest you will earn will equal $500 ×.05 × 40. B. The account's value at retirement is given by 5,000/(1.05^60-1)/.005 C. The future value...
"You plan to start saving for your retirement by depositing $9,583 exactly one year from now....
"You plan to start saving for your retirement by depositing $9,583 exactly one year from now. Each year you intend to increase your retirement deposit by 3%. You plan on retiring 30 years from now, and you will receive 6% interest compounded annually. This type of cash flow is called a geometric gradient. The formula to calculate the present worth of a geometric gradient is found in Table 3.6 in the textbook. However, in year 10, you have sudden expenses,...
Deryl is saving money for his retirement. Beginning one month from now, he will begin depositing...
Deryl is saving money for his retirement. Beginning one month from now, he will begin depositing a fixed amount into a retirement account that will earn 12% compounded monthly. He will make 360 such deposits. Then, one month after making his final deposit, he will start withdrawing $8,000 monthly for 25 years. The fund will continue to earn 12% companded mon hly How large should Deryl's monthly deposits be to achieve his retirement goal? A. $190 B. $214 C. $200...
You begin saving for retirement at age 25, and you plan to retire at age 70....
You begin saving for retirement at age 25, and you plan to retire at age 70. You want to deposit a certain amount each month into an account that pays an APR of 3% compounded monthly. Make a table that shows the amount you must deposit each month in terms of the nest egg you desire to have when you retire. (Round your answers to the nearest cent.)
You want to begin a saving for your retirement. You plan to contribute 12.000 to the...
You want to begin a saving for your retirement. You plan to contribute 12.000 to the account at the end of this year. You anticipate you will be increase your annual contributions by 3% each year for the next 45 years. IF your expected return is 8% (A.c.a), how much do you expect to have available for the consumption every month (suppose a constant amount of money every month) if you are planning to live 30 years more after retiring?
You wish to save money to provide for retirement. Beginning one year from now, you will...
You wish to save money to provide for retirement. Beginning one year from now, you will begin depositing a annual fixed amount into a retirement savings account that will earn 8% annually. You will make 30 such deposits. Then, one year after making the final deposit, you will withdraw $100,000 annually for 20 years (no more deposits). You wish to have $50,000 left in the account after the 20-year retirement period ends (note that this final cash flow has the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT