Ms. Frank is planning for a 25-year retirement period and wishes to withdraw a portion of...

Ms. Frank is planning for a 25-year retirement period and wishes to withdraw a portion of her savings at the end of each year. She plans to withdraw $10,000 at the end of the first year, and then to increase the amount of the withdrawl by $1000 each year, to offset inflation. How much money should she have in her saving account at the start of the retirement period if the bank pays (a) 9%, (b) 7.5% per year compounded annually?

PLEASE ANSWER IN EXCEL OR GIVE A FORMULA PLEASE

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 2 weeks ago

Next > < Previous

Related Solutions

Retirement planning Personal Finance Problem Hal Thomas, a 25-year-old college graduate, wishes to retire at age...

Retirement planning Personal Finance Problem Hal Thomas, a 25-year-old college graduate, wishes to retire at age 60. To supplement other sources of retirement income, he can deposit $2,200 each year into a tax-deferred individual retirement arrangement (IRA). The IRA will earn a return of 11% over the next 35 years. a. If Hal makes end-of-year $2,200 deposits into the IRA, how much will he have accumulated in 35 years when he turns 60? b. If Hal decides to wait until...

A couple will retire in 40 years; they plan to withdraw $39,000 a year in retirement,...

A couple will retire in 40 years; they plan to withdraw $39,000 a year in retirement, and they will make 20 withdraw. They believe that they can earn 8% interest on the retirement savings. - If they make annual deposit into their retirement savings, how much will they need to save each year? Assume the first deposit comes at the end of the first year, and the first withdraw comes at the end of year 41.

A man is planning to retire in 25 years. He wishes to deposit a regular amount...

A man is planning to retire in 25 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $80,000 for the next 15 years. How much must he deposit if the interest rate is 6% compounded quarterly?

Ann is now 25 years old and she is planning to start saving for retirement.

Problem: Saving for Retirement Ann is now 25 years old and she is planning to start saving for retirement. She expects her income of $60,000 in the coming year to grow at the (nominal) rate of 5% a year until she retires at the age of 65. She wants to save a fixed percentage of her income per year. She wants to save enough money to be able to consume per year 50% of her income (in real terms) just before...

You are planning to save for retirement over the next 25 years. To do this, you...

You are planning to save for retirement over the next 25 years. To do this, you will invest $700 per month in a stock account and $300 per month in a bond account. The return of the stock account is expected to be an APR of 9 percent, and the bond account will earn an APR of 5 percent. When you retire, you will combine your money into an account with an APR of 6 percent. All interest rates are...

You are planning to save for retirement over the next 25 years. To do this, you...

You are planning to save for retirement over the next 25 years. To do this, you will invest $900 a month in a stock account and $600 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a 8 percent return. How much can you withdraw each month from your account...

1. You are planning to save for retirement over the next 25 years. To do this,...

1. You are planning to save for retirement over the next 25 years. To do this, you will invest $1,400 a month in a stock account and $1,100 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 9 percent. How much can you withdraw each month from your...

You are planning to save for retirement over the next 25 years. To do this, you...

You are planning to save for retirement over the next 25 years. To do this, you will invest $1,000 a month in a stock account and $700 a month in a bond account. The return of the stock account is expected to be 11 percent APR compounded monthly, and the bond account will pay 7 percent APR compounded monthly. When you retire, you will combine your money into an account with a return of 9 percent. How much can you...

Newman plans to retire in 25 years and plans to withdraw end of the year payments...

Newman plans to retire in 25 years and plans to withdraw end of the year payments in the amount of $85,000 from his retirement account to allow him to enjoy the same standard of living he has enjoyed in life thus far. Newman’s financial planner has advised him that he should estimate his retirement will last 30 years and use a conservative 8% annual rate of return in his financial planning. Newman does already have $75,000 already...

Person: ABC Age:25 Retirement age: 60 Amount saved: Rs. 48,000 every year Use MS Excel/Google Sheets...

Person: ABC Age:25 Retirement age: 60 Amount saved: Rs. 48,000 every year Use MS Excel/Google Sheets formulas to calculate the total amount accumulated (from age 25 to age 60, ie 35 years) in the following cases: 1. Not invested 2. Invested in Fixed Deposits, at 5% annual returns 3. Invested in Equity Mutual Funds, at 12% annual returns Plot all 3 on a graph (preferably a single line graph with each line representing a different scenario) Note: Adjusting values for...

Subjects