Question

Assume that Social Security promises you $ 33 000 per year starting when you retire 45...

Assume that Social Security promises you $ 33 000 per year starting when you retire 45 years from today​ (the first $ 33000 will get paid 45 years from​ now). If your discount rate is 4 %​, compounded​ annually, and you plan to live for 17 years after retiring​ (so that you will receive a total of 18 payments including the first​ one), what is the value today of Social​ Security's promise?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Assume that Social Security promises you $43,000 per year starting when you retire 45 years from...
Assume that Social Security promises you $43,000 per year starting when you retire 45 years from today​ (the first $43,000 will get paid 45 years from​ now). If your discount rate is 7%​, compounded​ annually, and you plan to live for 18 years after retiring​ (so that you will receive a total of 19 payments including the first​ one), what is the value today of Social​ Security's promise? The value today of Social​ Security's promise is ​(Round to the nearest​...
a. Assume that Social Security promises you $42,000 per year starting when you retire 45 years...
a. Assume that Social Security promises you $42,000 per year starting when you retire 45 years from today​ (the first $42,000 will get paid 45 years from​ now). If your discount rate is 4%​, compounded​ annually, and you plan to live for 15 years after retiring​ (so that you will receive a total of 16 payments including the first​ one), what is the value today of Social​ Security's promise? The value today of Social​ Security's promise is ​$____? b. Assume​...
In 2012 the maximum Social Security deposit by an individual was $8,386.75. Suppose you are 33...
In 2012 the maximum Social Security deposit by an individual was $8,386.75. Suppose you are 33 and make a deposit of this amount into an account at the end of each year. How much would you have (to the nearest dollar) when you retire if the account pays 4% compounded annually and you retire at age 65?
You just celebrated your 40th birthday. You plan to retire when you turn 65. Today you...
You just celebrated your 40th birthday. You plan to retire when you turn 65. Today you have $105,736.62 accumulated in your retirement plan and plan to continue adding money each month to your retirement plan for exactly 25 years, starting one month from now. When you retire you will receive a $40,000 retirement bonus from your employer and will immediately deposit the money into your retirement plan. You will then use the accumulated funds to purchase an annuity that will...
In exchange for $1000 today, the bank promises to pay you $25 per year forever (assuming...
In exchange for $1000 today, the bank promises to pay you $25 per year forever (assuming you live forever). Your opportunity cost of capital is 5% compounded annually. If the first payment from the bank is scheduled to arrive next year, what effective annual interest rate is the bank paying out on this perpetuity? From a purely financial perspective, should you give $1000 to the bank or invest your money elsewhere?
you plan to retire 35 years from today. You want to invest the same amount each...
you plan to retire 35 years from today. You want to invest the same amount each year starting one year from now so you can withdraw $50000 each year during your retirement. You expect to live independently for 25 years following your retirement. You also need a lump sum of 350000 in 60 years to pay for permanent nursing care until you die. You earn 10% per year. You intend to make your first withdrawal one year after retiring. How...
suppose you wish to retire forty years from today. you determine that you need $50,000 per...
suppose you wish to retire forty years from today. you determine that you need $50,000 per year, with the first retirement amount withdrawn after one year from the day you retire. assume a nominal interest of 6% compounded quarterly and that you will need the retirement amount for 25 years after retirement. draw the cash flow and calculate how much you must deposit each quarter in your account starting one quarter from today until retirement.
You plan to deposit $2,500 per year for 4 years into a money market account with...
You plan to deposit $2,500 per year for 4 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. Do not round intermediate calculations. Round your answers to the nearest cent. What amount will be in your account at the end of 4 years? $ Assume that your deposits will begin today. What amount will be in your account after 4 years? $ You and your wife...
You just celebrated your 30th birthday and plan to retire when you turn 64. You have...
You just celebrated your 30th birthday and plan to retire when you turn 64. You have $15,568 accumulated in your RRSP and plan to deposit additional money each month to your RRSP for 34 years, starting today. On your 64th birthday you plan to withdraw $45,000 to pay off your mortgage and the remaining funds will be used to buy an annuity that will pay you $4,000/month for 26 years, with the first withdrawal starting one month after your 64th...
1.You are 18 today want to retire at age 65.   Starting with the day of your...
1.You are 18 today want to retire at age 65.   Starting with the day of your retirement, you would like to have an annuity initially in the amount of $35,000 per year (but growing at a 3% annual rate) for 35 years.      You will inherit $30,000 from your long lost uncle when you turn 34 and save that money as part of your financial plan. Assume an interest rate of 7% for all periods? How much must you put into...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT