Question

In: Finance

a) You are 21 and want to retire at the age of 60. Starting on your...

a) You are 21 and want to retire at the age of 60. Starting on your retirement date you’d like to have an annuity paying $25,000 per year for 25 years. Your uncle is giving you $10,000 when you graduate. How much would you need to save every year from next year to retirement to finish funding this annuity? Interest rates are 6%.

Solutions

Expert Solution

Amount required in retirement:

Calculator
Inputs:
FV                                        -  
PMT                         25,000.00
Rate (I/Y) 6.000%
Term N                                 25.00
Output:
PV                       319,583.90

Amount of contribution each year:

Calculator
Inputs:
FV 319,583.90
PV (10,000.00)
Rate (I/Y) per period 6.000%
Term N payments                  39
Output:
PMT ($1,534.20)

Answer is:

1534.20

please rate.

jeff jeffy answered 3 years ago
Next > < Previous

Related Solutions

You are 40 years old and want to retire at age 60. Each​ year, starting one...
You are 40 years old and want to retire at age 60. Each​ year, starting one year from​ now, you will deposit an equal amount into an investment account that pays 4.6​% interest. The last deposit will be on your 60th birthday. On your 60th birthday, you will switch the accumulated savings into a safer bank account that pays only 4.2​% interest. You will withdraw your annual income of ​$130,000 at the end of that year​ (on your 61st ​birthday)...
You are 40 years old and want to retire at age 65. Each​ year, starting one...
You are 40 years old and want to retire at age 65. Each​ year, starting one year from​ now, you will deposit an equal amount into an investment account that pays 4% interest. The last deposit will be on your 65th birthday. On your 65th birthday, you will switch the accumulated savings into a safer bank account that pays only 4.2​% interest. You will withdraw your annual income of $110,000 at the end of that year​ (on your 66th ​birthday)...
Suppose you are just starting your retirement savings at age 25, and plan to retire at...
Suppose you are just starting your retirement savings at age 25, and plan to retire at age 70. Your goal is to save a million dollars in your IRA and you believe you can earn a 7% rate of return on your investment. How much must you contribute to your IRA each year to meet your goal? Select one: a. $22,222 b. $3,500 c. $619 d. $21,881
You are 30 years old and want to retire at the age of age 65 and...
You are 30 years old and want to retire at the age of age 65 and expect to live another 25 years. On the day you retire, you want to have $900,000 in your retirement savings account. a) If you invest monthly starting one month from today and your investment earns 6.0 percent per year, How much money do you need to invest every month until you retire? b) You're retired with $900,000 and you have 25 more years. You...
You are currently 40 years old and intend to retire at age 60. To make your...
You are currently 40 years old and intend to retire at age 60. To make your retirement easier, you intend to start a retirement account. At the END of each of years, you will deposit some money to your retirement account till your retire. You expect the account will earn 7% per year. After retirement at age 60, you want to withdraw $10,000 from your retirement account at the END of each year for 10 years. How much money should...
You begin saving for retirement at age 25, and you plan to retire at age 60....
You begin saving for retirement at age 25, and you plan to retire at age 60. You want to deposit a certain amount each month into an account that pays an APR of 3% compounded monthly. Make a table that shows the amount you must deposit each month in terms of the nest egg you desire to have when you retire. (Round your answers to the nearest cent.) Nest egg size Needed deposit $100,000 $ $200,000 $ $300,000 $ $400,000...
You plan to retire at the age of 60. You are now 30 and plan to...
You plan to retire at the age of 60. You are now 30 and plan to save $8,000 per year for retirement, with the first deposit made one year from today. Your mutual fund account offers you 10% of return each year. You expect to live on your retirement fund till age 90 after retirement. Calculate total amount available for retirement at the age of 60. $1,365,510 $1,417,088 $1,315,952 $1,258,146
Suppose you plan to retire at age 70, and you want to be able towithdraw...
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $6,000 per month beginning with the first month after your 70th birthday until you reach your birthday at age 100. If the account which contains your savings earns 7% APR compounded monthly, how much money needs to be in the account by the time you reach your 70th birthday? (Answer to the nearest dollar.)
Suppose you plan to retire at age 70, and you want to be able to withdraw...
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $80,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 6% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday? (Answer to the nearest dollar.) Hint: This can be solved as a 30-year ordinary...
Suppose you plan to retire at age 70, and you want to be able to withdraw...
Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $87,000 per year on each birthday from age 70 to age 100 (a total of 31 withdrawals). If the account which contains your savings earns 5.7% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday? (Answer to the nearest dollar.) Hint: This can be solved as a 30-year ordinary...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT