Question

**Problem **

Daryl wishes to save money to provide for his retirement. He is now 30 years old and will be retiring at age 64. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 12% compounded monthly. Then one year after making his final deposit, he will withdraw $100,000 annually for 25 years. In addition, and after he passes away (assuming he lives 25 years after retirement) he wishes to leave in the fund a sum worth $1,000,000 to his nephew who is under his charge. The fund will continue to earn 12% compounded monthly. How much should the monthly deposits be for his retirement plan?

**(Please provide all the equation and step by step or
Excel.xml in google drive )**

**(Please don't copy from another places, the answer will
upload to Turnitin)**

Answer #1

Solution :-

Today's Age = 30

Retirement Age = 64

Total Monthly Deposits = ( 64 - 30 ) * 12 = 408

In case of 12% Compounded Monthly , Interest Rate per month = ( 12% / 12 ) = 1%

Effective Interest Rate per year = ( 1 + 0.12/12 )^{12}
- 1 = 1.1268 - 1 = 0.1268 = 12.68%

Present value of Annual 25 Years withdrawal of $100,000 at time of Retirement = $100,000 * PVAF ( 12.68% , 25 )

= $100,000 * 7.4864

= $748,642.20

Present Value of Money for nephew at time of Retirement = $1,000,000 * PVF ( 12.68% , 25 )

= $1,000,000 * 0.050535

= $50,534.52

Now the Present Value of total Amount Required at time of Retirement = $748,642.20 + $50,534.52

= $799,176.70

Now the monthly deposit be X

= X * FVAF ( 408 , 1% ) = $799,176.70

= X * 5752.85 = $799,176.70

X = $138.918

Therefore Monthly Deposit = $138.92

If there is any doubt please ask in comments

Thank you please rate

Daryl wishes to save money to provide for his retirement. He is
now 30 years old and will be retiring at age 64. Beginning one
month from now, he will begin depositing a fixed amount into a
retirement savings account that will earn 12% compounded monthly.
Then one year after making his final deposit, he will withdraw
$100,000 annually for 25 years. In addition, and after he passes
away (assuming he lives 25 years after retirement) he wishes to
leave...

Daryl wishes to save money to provide for his retirement. He is
now 30 years old and will be retiring at age 64. Beginning one
month from now, he will begin depositing a fixed amount into a
retirement savings account that will earn 12% compounded monthly.
Then one year after making his final deposit, he will withdraw
$100,000 annually for 25 years. In addition, and after he passes
away (assuming he lives 25 years after retirement) he wishes to
leave...

Daryl wishes to save money to provide for his retirement.
Beginning one year from now, Daryl will begin depositing the same
fixed amount each year for the next 30 years into a retirement
savings account. Starting one year after making his final deposit,
he will withdraw $100,000 annually for each of the following 25
years (i.e. he will make 25 withdrawals in all). Assume that the
retirement fund earns 12% annually over both the period that he is
depositing money...

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 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...

Bilbo Baggins wants to save money to meet his retirement
objectives. He would like to be able to retire 30 years from now
with a retirement income of $14,306 per month for 20 years, with
the first payment received 30 years and 1 month from now. After he
passes on at the end of the 20 years of withdrawals, he would like
to leave an inheritance of $719,228 to his nephew Frodo. Before his
retirement, he plans to deposit $2,000...

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...

a man wishes to save for his retirement pension plan which is 36
years from now. he planned to receive 100000 at the end of each
year for the nest 15 years starting from the first year of his
retirement. if the insurance company offers an investment of
11.495% interest rate compounded quarterly, what will be hi s
quarterly payments.
Please Solve As soon as
Solve quickly I get you UPVOTE directly
Thank's
Abdul-Rahim Taysir

a man wishes to save for his retirement pension plan which is 36
years from now. he planned to receive 100000 at the end of each
year for the nest 15 years starting from the first year of his
retirement. if the insurance company offers an investment of
11.495% interest rate compounded quarterly, what will be hi s
quarterly payments.
Please Solve As soon as
Solve quickly I get you UPVOTE directly
Thank's
Abdul-Rahim Taysir

Harry is planning to save for retirement over the next 25 years.
To do this, he plans to invest $500 per month, and his company will
match this with a deposit of $450 per month. The first payment will
be made today. He plans to earn an 11% APR (compounded monthly)
each year while he save. Assume that Harry will make monthly
withdraws beginning the month he retires; also, assume that he
plans to earn 3% APR (compounded monthly) on...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 14 minutes ago

asked 34 minutes ago

asked 38 minutes ago

asked 39 minutes ago

asked 39 minutes ago

asked 42 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago