For planning purposes, an individual wants to be able to spend $90,000 per year, at the end of each year, for an anticipated 30 years in retirement. In order to fund this retirement account, he plan to make annual deposits for 20 years at the end of his each working year. What is the amount he need deposit each year to fund his desired retirement spending? Use 10% as an annual simple rate for all calculations.

For planning purposes, an individual wants to be able to spend $90,000 per year, at the end of each year, for an anticipated 30 years in retirement. In order to fund this retirement account, he plan to make annual deposits for 20 years at the end of his each working year. What is the amount he need deposit each year to fund his desired retirement spending? Use 10% as an annual simple rate for all calculations.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

See similar textbooks

Similar questions

You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.
You wish to retire after 22 years; at which time you want to have accumulated enough money to receive an annuity of $68,000 a year for 25 years of retirement. During the period before retirement, you can earn 6 percent annually, while after retirement you can earn 4 percent on your money. What annual contribution to the retirement fund will allow you to receive the $68,000 annually?
You plan to retire in 20 years. At the point of retirement, you want to be able to withdraw 25478 at the end of each year forever. Assume that you earn a 7.11% rate of return prior to retirement and an 4.54% rate of return after retirement. If you do not want to make any further contributions to your retirement fund, how much do you need today? Round answer to the nearest dollar.
After retirement, you expect to live for 25 years. You would like to have a $95,000 income each year. The annual interest rate is 9 percent per year. Required: Calculate the amount of savings you have in your retirement account to receive this income. A) Assume that the payments start on the day of your retirement. B) Assume that the payments start one year after the retirement.
Your retirement fund's balance is $50,000 right now. You want to retire in 30 years with $1,000,000. You add $6000 annually, but what interest rate do you need to earn in order to reach your goal? please calculate manually
You want to begin saving for your retirement. You plan to contribute $12,000 to the account at the end of this year. You anticipate you will be able to increase your annual contributions by 3% each year for the next 45 years. If your expected annual return is 8%, how much do you expect to have in your retirement account when you retire in 45 years?
You intend to make the annual maximum contribution of $6,000 to your Roth IRA (individual retirement account) at the end of each year for the next 30 years. If you can earn 10 percent on your contributions, how much will you have at the end of the thirtieth year? Include the follwing variables to help you solve the problem: m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FV
Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once you retire, with the first retirement funds withdrawn one year from the day you retire. You estimate that you will earn 6% per year on your retirement funds and that you will need funds up to 25 years after retirement. Use the PV of an ordinary annuity due formula. a) Calculate the amount you must deposit in an account today so that you have enough funds for retirement b) Calculate the amount you must deposit each year, starting one year from today, so that you have enough funds for retirement.
Suppose you are 20 years old and plan to retire at exactly 60 years old. you will need to withdraw $5,000 per year from a retirement fund to supplement your social security payments. You expect to live to the age of 85. How much money should you place in the retirement fund each year to reach your retirement goal if you can earn 12% interest per year from the fund?
Use the information for the question(s) below. Assume that you are 30 years old today and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%. The present value (at age 30) of your retirement savings is closest to: O A. $87,000. OB. $46,600. OC. $75,230. O D. $108,000.
To supplement your planned retirement in exactly 42 years, you estimate that you need to accumulate $220,000 by the end of 42 years from today. You plan to make equal annual end-of-year deposits into an account paying 8 percent annual interest.a. How large must the annual deposits be to create the $220,000 fund by the end of 42 years?b. If you can afford to deposit only $600 per year into the account, how much will you have accumulated by the end of the forty-second year?
You estimate you need to supplement your social security payments with monthly withdrawals of $1,400.00 per month from a private investment account during the first 23 years of your retirement. Assuming you can earn annual returns of 5.2% in your investment account during your retirement years, how much money do you need to have accumulated in your investment account by the day you retire in order to fund the aforementioned monthly withdrawals?