Question

Alison is 28 years old and plans to retire at age 65 with 1,060,000 in her retirement account. What amount would she have to set aside now in investment paying 7% annual interest if the compounding is done daily? (Assume 365 days in a year.)

Answer #1

Future value of investment is calculated as: F= P*(1+(r/n))^(n*t); where F is Future value of the investment, P is Present value of the investment, r is the annual interest rate, n is number of times compounded per year and t is the number of years.

Given that the final amount should be 1060000. Number of years is 65-28= 37 Years, r is 7%, n is 365, becuase it was a daily compounding.

On Substituting, we get,

1060000= P*(1+7%/365)^(37*365)

1060000= P*13.326

P= 1060000/13.326

P= $79540.99

So, She should keep aside an amount of $79540.99

Ann E. Belle is age 45 and plans to retire in 20 years (at age
65). She has retirement savings in a mutual fund account, which has
a current balance of $150,000 (Ann does not plan to add any
additional money to this account). Also, Ann opened a 401K
retirement account with her new employer and will contribute
$15,000 per year into her 401K until retirement. If Ann’s mutual
fund account grows at an annual rate of 8.0% how much...

Assume that you are now 20 years old. You would like to retire
at age 60 and have a retirement fund of $6,000,000 at the time of
your retirement. You have already $10,000 at age 20 in the
retirement account. You expect to earn 6% per year. The amount of
money you must set aside each month to reach your retirement goal
is ?

Stefani German, a 40-year-old woman, plans to retire at age
65, and she wants to accumulate $440,000 over the next 25 years to
supplement the retirement programs that are being funded by the
federal government and her employer. She expects to earn an average
annual return of about 6% by investing in a low-risk portfolio
containing about 20% short-term securities, 30% common stock, and
50% bonds. Stefani currently has $27,960 that at an annual rate of
return of 6% will...

Assume that you are now 20 years old. You would like to retire
at age 60 and have a retirement fund of $6,000,000 at the time of
your retirement. You have already $10,000 at age 20 in the
retirement account. You expect to earn 6% per year. The amount of
money you must set aside each month to reach your retirement goal
is:
A.
$2500.00
B.
$3067.84
C.
$4,377.98
D.
$3500.00

Stefani? German, a? 40-year-old woman, plans to retire at age?
65, and she wants to accumulate ?$430 comma 000 over the next 25
years to supplement the retirement programs that are being funded
by the federal government and her employer. She expects to earn an
average annual return of about 5 % by investing in a? low-risk
portfolio containing about 20 % ?short-term securities, 30 %
common? stock, and 50 % bonds. Stefani currently has ?$41 comma 342
that at...

You are 35 years old today and want to plan for retirement at
age 65. You want to set aside an equal amount every year from now
to retirement. You expect to live to age 85 and want to withdraw a
fixed amount each year during retirement that at age 65 will have
the same purchasing power as $83,697 has today. You plan on
withdrawing the money starting the day you retire. You have not
saved any money for retirement....

You are 43 years old today and want to plan for retirement at
age 65. You want to set aside an equal amount every year from now
to retirement. You expect to live to age 95 and want to withdraw a
fixed amount each year during retirement that at age 65 will have
the same purchasing power as $98,093 has today. You plan on
withdrawing the money starting the day you retire. You have not
saved any money for retirement....

You are 44 years old today and want to plan for retirement at
age 65. You want to set aside an equal amount every year from now
to retirement. You expect to live to age 96 and want to withdraw a
fixed amount each year during retirement that at age 65 will have
the same purchasing power as $94,725 has today. You plan on
withdrawing the money starting the day you retire. You have not
saved any money for retirement....

Your client is 25 years old and wishes to retire at age 65. At
that time, your client wishes to have saved $2,000,000. You advise
the client to set aside money every year for the next 40 years.
This money will be invested in a fund that you believe will average
10% each year for the next 40 years.
Required:
How much will your client need to set aside for each payment
into the fund in order to accumulate the...

Marie just turned 28 and are now seriously planning for her
retirement. Marie wishes to retire two years earlier than the
mandatory retirement age of 65. She hopes to be able to make
end-of-month withdrawals from her retirement account of $25,000 per
month for a 30-year period after that.
Marie's plan is to fund her retirement by making monthly
deposits between now and when she retires. The initial monthly
deposit will be made at the end of the coming month....

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 22 minutes ago

asked 39 minutes ago

asked 49 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago