Question

2.You decide to start saving for your retirement, in 25 years time. Today you make an initial lump sum payment of 10,000, then decide to save 500 per semester and expect an average return of 6.6%(comp.semesterly or semiannually). How much will you have in the end, assuming you pay the money in the beginning of each semester? 3.Your bank has just launched a savings scheme which pays an interest at 5.15% monthly compounded, over 10 years. If you invest 100 at the end of each month, how much will you have at the end of those 10 years? 4.If you invest 50,000 a financial product that offers a 3% compounded monthly, for how long(number of months) you should keep that money invested there to finally get the double of what you initially invested?

Answer #1

2)

future value of annuity due= payment per period * [(1+i)^n - 1]/i *(1+i)

i = interest rate per period

n = number of periods

future value = 10000*(1+3.3%)^50 + 500 * [(1+3.3%)^50 - 1]/3.3%

= 112369.05

3)

future value of annuity= payment per period * [(1+i)^n - 1]/i

i = interest rate per period

n = number of periods

future value = 100 * [(1+(5.15%/12))^120 - 1]/(5.5%/12)

= 14657.35

4)

Present value = Future value/(1+i)^n

i = interest rate per period

n= number of periods

=>

50000 = 100000/(1+(3%/12)^n

=>

n = 277.61 months

= 23.13 years

You are 23 years old and decide to start saving for your
retirement. You plan to save $ 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 69. Suppose you earn 12% 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 age 40 to...

You are 30 years old and decide to start saving for your
retirement. You plan to save $ 5000 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 65 Suppose you earn 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 age 39...

You are 25 years old and decide to start saving for your
retirement. You plan to save $X 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 67. Suppose you earn 4% per year on
your retirement savings. You want the present value of your total
retirement savings to be $2Million. How do you need to save each
year (the same amount...

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...

You
are 26 years old and decide to start saving for your retirement.
You plan to save $6,000 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 65. Suppose you earn 6% per year on your
retirement savings, how much will you have saved for retirement
right at age 65? (Round to the nearest dollar.)

10. You are 29 years old and decide to start saving on your
retirement. You plan to save $6,000 at the end of each year (so the
first deposit will be one year from now) and make the last deposit
when you retire at age 65. Suppose you earn 6% per year on your
retirement savings. How much will you have saved for retirement at
the age of 65?
11. A rich relative has bequeathed you with a growing
perpetuity....

(Related to The Business of Life: Saving for
Retirement) (Future value of an ordinary annuity) You are
graduating from college at the end of this semester and after
reading the The Business of Life box in this chapter, you have
decided to invest $5,300 at the end of each year into a Roth IRA
for the next 42 years. If you earn 6 percent compounded annually on
your investment, how much will you have when you retire in 42
years?...

(Related to The Business of Life: Saving for
Retirement) (Future value of an ordinary annuity) You are
graduating from college at the end of this semester and after
reading the The Business of Life box in this chapter, you have
decided to invest $4,800 at the end of each year into a Roth IRA
for the next 47 years. If you earn 8 percent compounded annually on
your investment, how much will you have when you retire in 47
years?...

suppose that you have just celebrated your 18th birthday today.
You decide to start saving money to purchase your first home in 12
years, which will cost $650,000. You aim to save sufficient money
to pay the 15% initial deposit, and will take a mortgage to cover
the 85% of property cost. The nominal interest rate for the savings
account is 13% per annum compounded fortnightly. The nominal
interest rate charged by the mortgage provider is 6% per annum
compounded...

You would like to start saving for your retirement and are
trying to figure out how much to save. You estimate that you will
need $425,000 per year for the 35 years you’ll be retired. In
addition, you’d like to have an additional $60,000 in your fifth
year of retirement to buy a boat. Assume that you plan to save an
equal amount of money every year, starting next year for the 40
years you will be working (save in...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 54 seconds ago

asked 54 seconds ago

asked 3 minutes ago

asked 7 minutes ago

asked 8 minutes ago

asked 8 minutes ago

asked 10 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 11 minutes ago

asked 11 minutes ago

asked 12 minutes ago