Question

Sigmund is now 25 and working. He plans to take a year off when he is...

Sigmund is now 25 and working. He plans to take a year off when he is 35 and to travel during that year. He wants to be able to withdraw $2000 per month from his savings account during that year. Assume the savings account interest rate is 4% during the year in which Sigmund is travelling.

1. What is the interest rate per payment period (r)

2. What is the total number of payments (n) during the year that Sigmund is travelling?

3. Assuming the amount left in the account at the end of the year in which Sigmund is travelling will be 0, what amount must Sigmund accumulate in the account by the beginning of that year?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

SOLVED WITH BA II PLUS CALCULATOR

NEED HELP WITH MANUAL CALCULATION, LET ME KNOW, WILL DO IT, THANK YOU

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
Sigmund is now 25 and working. He plans to take a year off when he is...
Sigmund is now 25 and working. He plans to take a year off when he is 35 and to travel during that year. To allow him to take the year off he needs to save $23,488 by making monthly deposits in a savings account every month over the ten years from his 25th birthday to his 35th birthday. Assume that the savings account will pay an interest rate of 4% over those ten years and assume that there is no...
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live...
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live 30 years after his retirement. He wants to have enough money upon reaching retirement age to be able to withdraw $180,000 from his account at the end of each year he expects to live. Ahmad plans to accumulate the retirement fund by making an equal deposit at the of each year for the next 40 years. The interest rate is expected to be 12%...
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...
Jason plans to retire in 35 years and live 30 years after his retirement. He will...
Jason plans to retire in 35 years and live 30 years after his retirement. He will save $10,000 every year, starting from next year until his retirement (i.e. 35 years from today). After retirement, Jason wants to make 30 annual withdrawals. The withdrawals are the same over years. The first withdrawal will be made in the first year after his retirement. The annual interest rate is 5%, which applies the whole time to his retirement account. How much can Jason...
Cam saved ​$280 each month for the last four years while he was working. Since he...
Cam saved ​$280 each month for the last four years while he was working. Since he has now gone back to​ school, his income is lower and he cannot continue to save this amount during the time he is studying. He plans to continue with his studies for three years and not withdraw any money from his savings account. Money is worth 3.9​% compounded monthly. (a) How much will Cam have in total in his savings account when he finishes...
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 73.0 when he fully retires, he will wants to have $3,423,684.00 in his retirement account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire at the age of 65. He already has $5000 in his savings that he received as a gift from his mother. He plans to save some of his income each year during his working years and he plans to increase his savings at a constant 5% each year. He wants to be able to spend $100.000 for 20 years after his retirement and at...
Frank recently graduated from MIT with a Ph.D. in Physics. He has started an investment company...
Frank recently graduated from MIT with a Ph.D. in Physics. He has started an investment company applying his mathematical knowledge to valuing assets. Frank is 40 and plans to retire at 65 or 25 years from now. He wants to travel much like Debbie during his retirement and must start saving now. How much must he save per month for the next 25 years to be able to withdraw $24,368.98 per month? Assume he will live for 20 years after...
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...
Tim has just had his 45th birthday. He has two children. One will go to college...
Tim has just had his 45th birthday. He has two children. One will go to college 4 years from now and require four year beginning of year payments for college expenses, $18,000, $19,500, $20,500, and $21,500. The other will go to college 9 years from now and require four year beginning of year payments for college expenses, $23,000, $23,500, $24,000, and $24,500. In addition, Tim plans to retire in 20 years. Tim wants to be able to withdraw $100,000 per...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT