Question

Problem 4 and 5-3 Future Value and Number of Annuity Payments

Your client has been given a trust fund valued at $1.12 million. He cannot access the money until he turns 65 years old, which is in 25 years. At the time, he can withdraw $24,000 per month.

If the trust fund is invested at a 5.0 percent rate, how many
months will it last your client once he starts to withdraw the
money? **(****Assume annual compounding. Do not
round intermediate calculations and round your final answer to 2
decimal places.)**

Answer #1

Future value = present value*(1+ rate)^time |

Future value = 1120000*(1+0.05)^25 |

Future value = 3792717.53 |

Assuming ordinary annuity (please let me know if anwer is not correct , it may be annuity due, not clear in the question)

PV_{Ordinary Annuity} = C*[(1-(1+i/100)^(-n))/(i/100)] |

C = Cash flow per period |

i = interest rate |

n = number of payments |

3792717.53380731= 24000*((1-(1+ 5/1200)^(-n*12))/(5/1200)) |

n(in years) = 21.53 |

Months = 21.53*12=258.36 months

Your client has been given a trust fund valued at $1.58 million.
She cannot access the money until she turns 65 years old, which is
in 15 years. At that time, she can withdraw $24,000 per month.
If the trust fund is invested at a 5.5 percent rate, how many
months will it last your client once she starts to withdraw the
money

27. 5-52 Investing for Retirement (LG4,
LG9)
Ross has decided that he wants to build enough retirement wealth
that, if invested at 6 percent per year, will provide him with
$4,600 of monthly income for 30 years. To date, he has saved
nothing, but he still has 20 years until he retires.
How much money does he need to contribute per month to reach his
goal? (Do not round intermediate calculations and round
your final answer to 2 decimal...

Your client is 25 years old and wishes to retire at age 65. At
that time, your client wishes to have saved $2,000,000. You advise
the client to set aside money every year for the next 40 years.
This money will be invested in a fund that you believe will average
10% each year for the next 40 years.
Required:
How much will your client need to set aside for each payment
into the fund in order to accumulate the...

Problem 5.14 (Future Value of an Annuity)
Find the future values of these ordinary
annuities. Compounding occurs once a year. Do not round
intermediate calculations. Round your answers to the nearest
cent.
$500 per year for 6 years at 12%.
$250 per year for 3 years at 6%.
$200 per year for 2 years at 0%.
Rework parts a, b, and
c assuming they are annuities due.
Future value of $500
per year for 6 years at 12%: $
Future...

Problem 4-33
Required Annuity Payments
Assume that your father is now 50 years old, that he plans to
retire in 10 years, and that he expects to live for 25 years after
he retires - that is, until he is 85. He wants his first retirement
payment to have the same purchasing power at the time he retires as
$50,000 has today. He wants all his subsequent retirement payments
to be equal to his first retirement payment. (Do not let...

Problem 4-33
Required Annuity Payments
Assume that your father is now 50 years old, that he plans to
retire in 10 years, and that he expects to live for 25 years after
he retires - that is, until he is 85. He wants his first retirement
payment to have the same purchasing power at the time he retires as
$50,000 has today. He wants all his subsequent retirement payments
to be equal to his first retirement payment. (Do not let...

Problem 4 and 5-6 Present Value and Annuity Payments
A local furniture store is advertising a deal in which you buy a
$4,400 living room set with three years before you need to make any
payments (no interest cost is incurred).
How much money would you have to deposit now in a savings
account earning 6 percent APR, compounded monthly, to pay the
$4,400 bill in three years? (Do not round intermediate
calculations and round your final answer to 2...

Your client is 21 years old. She wants to begin saving for
retirement, with the first payment to come one year from now. She
can save $8,000 per year, and you advise her to invest it in the
stock market, which you expect to provide an average return of 11%
in the future.
a. If she follows your advice, how much money will she have at
65? Round your answer to the nearest cent.
$
b. How much will she...

Your client is 23 years old. She wants to begin saving for
retirement, with the first payment to come one year from now. She
can save $15,000 per year, and you advise her to invest it in the
stock market, which you expect to provide an average return of 8%
in the future.
A. If she follows your advice, how much money will she have at
65? Round your answer to the nearest cent.
B. How much will she have...

Your client is 21 years old. She wants to begin saving for
retirement, with the first payment to come one year from now. She
can save $10,000 per year, and you advise her to invest it in the
stock market, which you expect to provide an average return of 6%
in the future.
If she follows your advice, how much money will she have at 65?
Round your answer to the nearest cent.
$
How much will she have at...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 33 minutes ago

asked 38 minutes ago

asked 42 minutes ago

asked 57 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago