Question

Annual mean is 79520 a. According to retirement-plan provider Fidelity Investments, a good rule of thumb...

Annual mean is 79520
a. According to retirement-plan provider Fidelity Investments, a good rule of thumb is to have 10 times
your final salary in savings if you want to retire by age 67 (we will replace final salary by mean salary).
What is 10 times the mean salary that you wrote down in part a. ?
Hint: Literally multiply the number in part a. by 10.
b. If you work for 40 years and make monthly deposits into a retirement account that earns interest at
the rate of 4.8%/year compounded monthly, what should the amount of each of your deposits be so
that the balance after 40 years can be the number from part a. ?
c. Based on your dream job's mean annual salary, are the monthly payments that you found in part b.
feasible ? Support your answer with numbers !

please show steps

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
A- What is 10 times the mean salary that you wrote down in part a Mean salary*10 79520*10 795200
B- Monthly payment = Future value at time of retirement/FVAF at .4% for 480 months 795200/1448.72 548.90
Future value at the time of retirement 795200
FVAF at .4% for 480 months =(1+r)^n -1 / r (1.004)^480 -1 / .4% 5.79488/.4% 1448.72
C- yes amount of 548.90 seems feasible because amount seems less but period of investment is more which results in compounding effect that will accumulate sufficient fund to achieve the retirement goals.
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
Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.3% × service years...
Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.3% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $91,000 at the end of 2018 and the company's actuary projects her salary to be $285,000 at...
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% × service years...
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $91,000 at the end of 2021 and the company's actuary projects her salary to be $285,000 at...
Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years...
Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2018 and the company's actuary projects her salary to be $240,000 at...
STATE: Andrew plans to retire in 40 years. He plans to invest part of his retirement...
STATE: Andrew plans to retire in 40 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that from 1966 to 2015, the annual returns on S&P 500 had mean 11.0% and standard deviation 17.0% . PLAN: The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal. We can use the Central...
Andrew plans to retire in 32 years. He plans to invest part of his retirement funds...
Andrew plans to retire in 32 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal....
1. What is an ISP (Integrated Service Provider) for supply chains? (1 point) A. A consultant...
1. What is an ISP (Integrated Service Provider) for supply chains? (1 point) A. A consultant agency which integrates the supply chain for companies B. A 2 PL or a 3PL, but not a 4PL C. A company supplying transportation and warehousing services D. A logistics service company specialized in suppling VAS (value added services) 2. What characterizes a 4 PL? (1 point) A. They are non-asset based and provides integrated services primarily supplied by asset based providers, for example...
Prevosti Farms and Sugarhouse pays its employees according to their job classification. The following employees make...
Prevosti Farms and Sugarhouse pays its employees according to their job classification. The following employees make up Sugarhouse's staff: Employee Number Name and Address Payroll information A-Mille Thomas Millen Hire Date: 2-1-2019 1022 Forest School Rd DOB: 12-16-1982 Woodstock, VT 05001 Position: Production Manager 802-478-5055 PT/FT: FT, exempt SSN: 031-11-3456 No. of Exemptions: 4 401(k) deduction: 3% M/S: M Pay Rate: $35,000/year A-Towle Avery Towle Hire Date: 2-1-2019 4011 Route 100 DOB: 7-14-1991 Plymouth, VT 05102 Position: Production Worker 802-967-5873...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you choose and give reasons why you would or would not want a benefit that were used in making the benefit selections (specially at at entry level making $30000). PROCEDURES: Assume that you recently graduated from college and are just starting a new job at a large firm. You will be receiving a starting net pay (net of all taxes and mandatory deductions) of $30,000....
Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe,...
Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a paralegal for a law firm. During 2016, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income—    City of Albuquerque general purpose bonds $1,000    Ford Motor company bonds 1,100    Ally Bank certificate of deposit 400 2,500 Child...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT