Question

Sarah Wiggum would like to make a single investment and have $ 1.3 million at the time of her retirement in 30 years. She has found a mutual fund that will earn 3% annually. How much will Sarah have to invest today? If Sarah invests that amount and could earn a 15% annual return, how soon could she retire, assuming she is still going to retire when she has $ 1.3 million? Click on the table icon to view the PVIF table LOADING... To have $ million at retirement, the amount Sarah must invest today is $ nothing. (Round to the nearest cent.)

Answer #1

A) The amount to be invested today to get $1.3 million after 30 years at 3% return is given by-

Present value of investment =future value /(1+interest rate) ^time

1300000*(1/((1+3%)^30) )

=1300000*PVIF(30,3%)

=1300000*0.4119867

=535582. 71

B) Let the time at which 535582.71 can be invested for retirement be x

Therefore,

Present value of investment = future value /(1+interest rate) ^ time

535582.71=1300000 /(1+15%) ^x

535582.71 =1300000 pvif(x,15%)

PVIF( x, 15%)=535582.71 /1300000

PVIF(x, 15%)=0.4119867

1/(1+15%)^x=0.4119867

1/0.4119867=(1+15%)^x

x=6.344819 years

Sarah could retire in 6.344819 or 6.34 years as compared to 30 years

(note if pvif values are given then you can easily find x, otherwise x will be calculated as -

1/0.4119867=(1+15%)^x

2.4272628=1.15^x

Taking log both side

Log(2.4272628)=xlog 1.15

X=log(2.4272628)/log(1.15)

x=6.34 years approx)

Sarah Wiggum would like to make a single investment and have
$1.3 million at the time of her retirement in 30 years. She has
found a mutual fund that will earn 3 percent annually. How much
will Sarah have to invest today? If Sarah invests that amount and
could earn a 13 percent annual return, how soon could she retire,
assuming she is still going to retire when she has $1.3
million?

Sarah Wiggum would like to make a single investment and have $2
million at the time of her retirement in 35 years. She has found a
mutual fund that will earn 4 percent annually. How much will Sarah
have to invest today? If sarah invests that amount and could earn a
14 percent annual return, how soon could she retire, assuming she
is still going to retire when she has $2 million?

(Present value) Sarah Wiggum would like to make a single
investment and have
$1.6
million at the time of her retirement in
28
years. She has found a mutual fund that will earn
5
percent annually. How much will Sarah have to invest today? If
Sarah earned an annual return of
17
percent, how soon could she then retire?
a. If Sarah can earn
5
percent annually for the next
28
years, the amount of money she will have...

Sarah Wiggum would like to make a single investment and have
$2.3 million at the time of her retirement in 34 years. She has
found a mutual fund that will earn 8 percent annually. How much
will Sarah have to invest today? If Sarah earned an annual return
of 16 percent, how soon could she then retire?

Sarah Wiggum would like to make a single investment and have
$1.9 million at the time of her retirement in 25 years. She has
found a mutual fund that will earn 55 percent annually. How much
will Sarah have to invest today? If Sarah earned an annual return
of 15 percent, how soon could she then retire?

1.Sarah Wiggum would like to make a single investment and have
$1.8 million at the time of her retirement in 35 years. She has
found a mutual fund that will earn 7 percent annually. How much
will Sarah have to invest today? If Sarah earned an annual return
of 18 percent, how soon could she then retire?
a. If Sarah can earn 7 percent annually for the next 35 years,
the amount of money she will have to invest today...

(Future value) Sarah Wiggum would
like to make a single lump-sum investment and have $1.7 million
at the time of her retirement in 28 years. She has found a mutual
fund that expects to earn 5 percent annually. How much must Sarah
invest today? If Sarah earned an annual return of 16 percent, how
much must she invest today?
If Sarah can earn 5 percent annually for the next 28 years,
how much will she have to invest today?
$...

You are planning for a very early retirement. You would like to
retire at age 40 and have enough money saved to be able to draw
$210,000 per year for the next 40
years (based on family history, you think you'll live to age
80).
You plan to save for retirement by making 20
equal annual installments (from age 20 to age 40) into a
fairly risky investment fund that you expect will earn 10%
per year. You will leave...

Naomi is a 20-year old college student with an assignment to
write out her plans for retirement. She is investigating several
ways she can accumulate $1 million by the time she is 50 years
old. She is considering a long-term certificate of deposit (CD)
that pays
2
%
annually and an annuity that returns
3
%
annually. She also did research and found that the average
long-term return from stock market investments is between
9
%
and
11
%.
Answer...

Peter and Blair recently reviewed their future retirement income
and expense projections. They hope to retire in 25 years and
anticipate they will need funding for an additional 14 years. They
determined that they would have a retirement income of $49,000,000
in today's dollars, but they would actually need
$69,654 in retirement income to meet all of their objectives.
Calculate the total amount that Peter and Blair must save if they
wish to completely fund their income shortfall, assuming a...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 5 minutes ago

asked 58 minutes ago

asked 58 minutes ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago

asked 4 hours ago

asked 4 hours ago

asked 4 hours ago