Question

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 to start saving (again, with your first deposit at the end of the year)?

show

Answer #1

a) Age = 30 years.

Annuity = $ 5000 at the end of each year

Retirement age = 65 years

Interest = 11 % pa.

Number of Annuity payments made = 65 - 30 = 35 years

**Calculation of saving for retirement**

FV = A((1+r)^n -1) / r

where A = annuity

r = Interest rate

n = Time period

FV = 5000((1+0.11)^35 -1) / 0.11

FV = 5000(38.5748510 -1) / 0.11

FV = 5000(37.5748510) / 0.11

FV = 5000 * 341.5895548

**FV = $ 1,707,947.77**

**Saving for retirement = $ 1,707,947.77**

**b) Calculation of Savings for retirement,if you wait
until age 39 to start saving**

Number of Annuity payments made = 65 - 39 = 26 years

FV = A((1+r)^n -1) / r

FV = 5000((1+0.11)^26 -1) / 0.11

FV = 5000(15.079865 -1) / 0.11

FV = 5000(14.079865) / 0.11

FV = 5000 * 127.998771

**FV = $ 639,993.86**

**Saving for retirement = $ 639,993.86**

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
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....

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 just turned 30 years old, and decided that it is time to
start saving for retirement. Based on
your anticipated income and expenses, you expect to be able to
invest $4,000 each year until you
are 50 years old, and then $5,000 each year until you retire at
age 65.
You expect to earn 6.1% on your investments. What is the
expected value of your retirement
account at age 65?
During retirement, you expect to spend about $160000 per...

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
$ 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 $ 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...

You are trying to decide how much to save for retirement. Assume
you plan to save $5,000 per year with the first investment made one
year from now. You think you can earn 10% per year on your
investments and you plan to retire in 43 years, immediately after
making your last $5,000 investment. Please show how to solve on
Excel.
a. How much will you have in your retirement account on the day
you retire?
b. If, instead of...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 6 minutes ago

asked 10 minutes ago

asked 24 minutes ago

asked 39 minutes ago

asked 58 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago