Question

Chelsea will retire in fifteen years. Once she is retired, she will live for 20 years...

Chelsea will retire in fifteen years. Once she is retired, she will live for 20 years and need 50,000 per year to cover her expenses (from the end of year 16 through 35). When she retires in 15 years, she will sell her house for 800,000 and buy a condominium for 600,000. She currently has 60,000 in savings and the discount rate is 3%.

A) Between the end of this year and the end of year 15, how much does Chelsea need to save to afford her retirement? (Take into account her savings and all cash flows)

B) What if Chelsea cannot save anything until the end of year 5? Holding all else the same, how much would Chelsea have to save between the end of year 6 and end of year 15 to afford retirement?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A woman plans to retire in 40 years, and she expects to live for 30 years...
A woman plans to retire in 40 years, and she expects to live for 30 years after that. She wants to spend 10,000 a month after she retires. To finance her retirement she is going to invest monthly (with her investment one month from know) over 40 years at 12.6%. After she retires she will move her investment to a more liquid account earning 7.2% a year. Ignore taxes and transaction costs. How much does she have to sabe a...
You plan to retire in fifteen years. Since you’ll be retiring relatively young you plan to...
You plan to retire in fifteen years. Since you’ll be retiring relatively young you plan to live in retirement for 25 years. You haven’t been able to save much so far and you’ve only accumulated $5,000 towards retirement. You think you will need $100,000/year to live in retirement. If you can invest at 6% annually, how much will you have to invest between now and then to achieve your goals?
Suppose Rachel wishes to retire fifty years from today. She needs $8,000 per month once she...
Suppose Rachel wishes to retire fifty years from today. She needs $8,000 per month once she retires, with the first retirement funds withdrawn one month from the day Rachel retires. Rachel estimates that she will earn effective annual rate of 3.66% on her retirement funds. Rachel also believes she will need funds up and including her 40th birthday after retirement. How much must she deposit each year in her retirement funds, so that she has enough funds for retirement?
Mary's 25th birthday is today, and she hopes to retire on her 65th birthday. She has...
Mary's 25th birthday is today, and she hopes to retire on her 65th birthday. She has determined that she will need to have $5,000,000 in her retirement savings account in order to live comfortably. Mary currently has no retirement savings, and her investments will earn 7% annually. How much must she deposit into her account at the end of each of the next 40 years to meet her retirement savings goal?
sandra is planning for her retirement. She is 35 years old and expects to retire in...
sandra is planning for her retirement. She is 35 years old and expects to retire in 40 years from now. She expects to live for another 25 years after retirement. Her current anneal expenditures are 54,000 and she expects them to increase at a rate of 3%per year, the rate of inflation, until she retires Upon retiring, her expenditures will be equal to her consumption expenditure at 75. Sandra belives that she can accumulate 2m$ by the time she retires....
Marcia Stubern is planning for her golden years. She will retire in 20 years, at which...
Marcia Stubern is planning for her golden years. She will retire in 20 years, at which time she plants to begin withdrawing $50,000 annually to pay for living expenses. He is expected to live for 30 years following her retirement. Her financial advisor thinks she can earn 7% annually before retirement and 10% after his retirement. How much does he need to invest at the end of each quarter to prepare for his fnancial needs after retirement.
Your father is 50 years old and will retire in 10 years. He expects to live...
Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24...
our father is 50 years old and will retire in 10 years. He expects to live...
our father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $60,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24...
Your father is 50 years old and will retire in 10 years. He expects to live...
Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24...
Your father is 50 years old and will retire in 10 years. He expects to live...
Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT