Question

Suppose Jim wants to be able to withdraw $10,000 at the end of five years and withdraw $12,000 at the end of six years, leaving a zero balance in the account after the last withdrawal. If Jim can earn 5% on his balances, how much does he need to deposit today to satisfy his withdrawals needs?

Answer #1

Marvin the Martian is thinking about retirement. He wants to be
able to withdraw $5,450 from his retirement account every quarter
for the next 15 years. If his bank pays a nominal annual rate of
6.25% compounded weekly, how much money does Marvin the Martian
need to deposit in his retirement account today to be able to
complete each quarterly withdrawal for the next 15 years?

Billy plans to withdraw $500 at the end of every 3-months for
14-years from a fund. He wants to make his first withdrawal
3-months from today. How much does Billy have to deposit today if
interest is earned at j4 = 9% for the first 6-years and
j4=5% for the last 8-years?

BACKGROUND:
Jason wants to know how much money he needs to have in his
retirement account on the day he retires. Jason makes the following
ASSUMPTIONS:
--He will withdraw a DIFFERENT amount from his retirement
account each year he is retired. He will adjust the withdrawals for
inflation each year, following his first annual withdrawal.
--Jason wants to withdraw the equivalent of $75,000 (in terms of
today's dollars) in the FIRST year he is retired. Following this,
each withdrawal will...

Henry Quincy wants to withdraw $30,000 each year for 15 years
from a fund that earns 12% interest. How much must he invest today
if the first withdrawal is at year-end? How much must he invest
today if the first withdrawal takes place immediately?
A. First withdrawal at year-end
B. First withdrawal immediately
Pearl Alvarez is investing $385,400 in a fund that earns 11%
interest compounded annually. What equal amounts can Pearl withdraw
at the end of each of the...

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...

Gabriel Lombardo just retired today. He is going to take out a
withdrawal of $150,000 today to fund his quest for extreme sports
for 3 years. Then he will make 30 annual unequal withdrawals from
his savings with the first withdrawal occurring at t=2. He wants
each withdrawal to have the same purchasing power as $70,000 has
today so the withdrawals need to grow at a constant rate of 3% to
compensate for expected inflation per year. His savings account...

Mr. Gonzales has made beginning-of-year deposits into an
investment account for the past 21 years. Each deposit was $5500,
and the account earned interest at a rate of 4.5% APR, compounded
quarterly, each year. Having made his last deposit one year ago, he
now plans to transfer all of the accumulated funds today into a
money-market account that earns an APR of 1.50% compounded
quarterly. If he plans to withdraw $4000 from the account at the
end of each quarter...

Leon Quincy wants to withdraw $31,500 each year for 14 years
from a fund that earns 9% interest.
Click here to view factor tables
How much must he invest today if the first withdrawal is at
year-end? How much must he invest today if the first withdrawal
takes place immediately? (Round factor values to 5 decimal places,
e.g. 1.25124 and final answers to 0 decimal places, e.g.
458,581.). A) first withdraws at year end?
B) First withdrawal immediately?

Chris Quincy wants to withdraw $40,000 each year for 7 years
from a fund that earns 15% interest.
How much must he invest today if the first withdrawal is at
year-end? How much must he invest today if the first withdrawal
takes place immediately? (Round factor values to 5 decimal places,
e.g. 1.25124 and final answers to 0 decimal places, e.g.
458,581.)

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...

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