Question

In: Finance

How much money does Mandy need to deposit into her investment account today if she wishes...

How much money does Mandy need to deposit into her investment account today if she wishes to withdraw $80,000 a year for 20 years, starting at the end of the year? She expects to earn an average rate of return of 10 percent. $703,287.38 $681,085.10 $904,298.28 $805,298.40

Solutions

Expert Solution

Answer:$681,085.10

The amount she has to deposit can be determined by finding out the Present Value of annuity.

Excl can be used to serve this purpose.The function used =PV()

The number of years =20 the interest rate =10% The withdrawal amount(annual payments)=$80,000

The Formula used =PV(B3,B2,-B4) we get the amount to be deposited as $681,085.10


Related Solutions

How much money does Suzie need to have in her retirement savings account today if she...
How much money does Suzie need to have in her retirement savings account today if she wishes to withdraw $42,000 a year for 25 years? She expects to earn an average rate of return of 9.55 percent. Group of answer choices $394,819.18 $407,419.81 $385,160.98 $390,202.69 $388,683.83
Diana is saving for her education. She will deposit some money into a savings account today...
Diana is saving for her education. She will deposit some money into a savings account today and in addition, deposit $500 per month for the next 2 years (24 deposits) starting one month from now. Her goal is to have enough money in the account so that she can withdraw $3,000 per month for 4 years (48 withdrawals) while she attends college and still have $8,000 left at the end for a trip to South America to celebrate her graduation....
How much money would Pay have in a fixed deposit bank account if she deposited $10,000...
How much money would Pay have in a fixed deposit bank account if she deposited $10,000 for five years, if the account pays an APR of 6% compounded. a. Continuously b. 4 times a year c. 365 times a year
a. How much money (a single lump sum) do you need to deposit today (t=O) to...
a. How much money (a single lump sum) do you need to deposit today (t=O) to have $1,000,000 in 30 years if you earn a 5.5% rate of return compounded annually with no additional investment? What about a 9.5% rate of return compounded annually? How about 1.7%? b.  If you purchase a new 2014 Ford for $30,000 today, what is your monthly payment if you borrow at a 6% nominal rate compounded monthly? Assume that you put 10% of the cost...
Assume i=8% year. How much money do I have to deposit today(year 0) in an account...
Assume i=8% year. How much money do I have to deposit today(year 0) in an account that will generate $25000 from year 12 to infinity.
How much should you deposit at the end of each month into an investment account that...
How much should you deposit at the end of each month into an investment account that pays 8.5 % compounded monthly to have $ 1 million when you retire in 43years? How much of the $1 million comes from​ interest?
If you deposit money today in an account that pays 15.0% annual interest, how long will...
If you deposit money today in an account that pays 15.0% annual interest, how long will it take to double your money?
If you deposit money today in an account that pays 11% annual interest, how long will...
If you deposit money today in an account that pays 11% annual interest, how long will it take to double your money? Round your answer to two decimal places.
If you deposit money today in an account that pays 13.5% annual interest, how long will...
If you deposit money today in an account that pays 13.5% annual interest, how long will it take to double your money? Round your answer to two decimal places.
If you deposit money today in an account that pays 13% annual interest, how long will...
If you deposit money today in an account that pays 13% annual interest, how long will it take to double your money? Round your answer to two decimal places. 3 and a half years would be entered as 3.50 years If you made yearly payments of $5344 at the end of each year into an investment, how long would it take you to save up $1,000,000 if you earned a rate of 8%. Enter your answer in whole years. (ex....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT