Question

Angela is 22 years old and would like to retire at the age of 62 with...

Angela is 22 years old and would like to retire at the age of 62 with $1,000,000 in her retirement account. Assuming a 6% return, how much does Angela need to put away on a monthly basis to ensure her retirement goal of $1,000,000? Assume those monthly payments are made at the end of the month. You must show your work!

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution:

Angela would start the saving when she is 22 and this will continue till when she is 62. Means that the time = 40 years = 40 *12 = 480 months

Annual return = 6% , Monthly return = 6%/12 = 0.5%

Future value = $1,000,000

Future value of annuity formula can be used to find the monthly saving to reach the retirement goal

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
Suppose you are 35 years old and would like to retire at age 60. Furthermore, you...
Suppose you are 35 years old and would like to retire at age 60. Furthermore, you would like to have a retirement fund from which you can draw an income of ​$150,000 per year-​forever! How much would you need to deposit each month to do​ this? Assume a constant APR of 8% and that the compounding and payment periods are the same. To draw $150,000 per​ year, there must be ​$___ in your savings account when you retire. You can...
Assume that you are now 20 years old. You would like to retire at age 60...
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 ?
Assume that you are now 20 years old. You would like to retire at age 60...
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
10. You are 30 years old and planning to retire at age 62. You want to...
10. You are 30 years old and planning to retire at age 62. You want to plan your finances for living 35 years past age 62 and then die dead broke. You determine that you will need $3000 per month for the 35 years. At age 62, you plan to go live in the tropics on the beach and live on coconuts, rum and fishing. You need to conclude your retirement savings at age 55 because all your spare money...
You are 30 years old today. You want to retire at the age of 60. You...
You are 30 years old today. You want to retire at the age of 60. You expect to live until age 85. You would like to have a monthly income of ​$13,000 per month in retirement. How much do you have to save per month during your working years in order to achieve your retirement​ goal? Assume end of period payments. Assume an annual interest rate of 3.5​% in retirement and 5​% during your working life. How much do you...
Suppose you are 30 years old and want to retire at the age of age 70...
Suppose you are 30 years old and want to retire at the age of age 70 and expect to live another 20 years. On the day you retire, you want to have $1,000,000 in your retirement savings account. i. If you invest monthly starting one month from today and your investment earns 6.0 percent per year, How much money do you need to invest every month until you retire? ii. Now you’re retired with $1,000,000 and you have 20 more...
Sectoion 13.3 10. Mrs. Bell expects to retire in 7 years and would like to receive...
Sectoion 13.3 10. Mrs. Bell expects to retire in 7 years and would like to receive $800 at the end of each month for 10 years following the date of her retirement. How much must Mrs. Bell deposit today in an account paying 7.5% compounded semi-annually to receive the monthly payments?  
Nikola is currently 47 years old and planning to retire at age 63. She has already...
Nikola is currently 47 years old and planning to retire at age 63. She has already saved $247,000.00 in her RRSP. If she continues to contribute $400.00 at the beginning of every month, how much money will be in her RRSP at retirement if it can earn 8% compounded monthly? No deposit is made the day she turns 63. At retirement, Nikola’s $247,000.00 will have grown to   and her $400.00 deposits will have grown to   , for a total of...
You are 45 years old and planning to retire at age 65. You expect to live...
You are 45 years old and planning to retire at age 65. You expect to live until age 85. Your retirment investment earns 9% per year. You want to guarentee that you will withdrawl 15000 per month during retiremnent. You expect that inflation will be 3% per year including years in retirement. How much must you save per month until retirment to fund your plan. HINT: Your retirment withdrawl will increase every month at the inflation rate of 3%. The...
You are 23 years old and need to have $1,160,000 in savings before you retire at...
You are 23 years old and need to have $1,160,000 in savings before you retire at age 72. You estimate you will receive an annual return of 7% on investments. a. How much do you need to put into retirement savings on an annual basis? (Input your answer as a positive value. Round your answer to 2 decimal places.) b. How much do you need to put into retirement savings on an annual basis if you get an annual return...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT