Question

In: Finance

peter wants to retire in 20 years. his investment goal at retirement is 2,000,000. how much...

peter wants to retire in 20 years. his investment goal at retirement is 2,000,000. how much must he invest and the beginning of each year to reach his goal if the average rate of return us 12 percent?

Solutions

Expert Solution

Future Value of an Annuity Due
= C*[(1+i)^n-1]/i] * (1+i)
Where,
c= Cash Flow per period
i = interest rate per period
n=number of period
2000000= C[ (1+0.12)^20 -1 /0.12] * (1 +0.12)
2000000= C[ (1.12)^20 -1 /0.12] * 1.12
2000000= C[ (9.6463 -1 /0.12] * 1.12
C =24783.54
Correct Answer = $24783.54

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Carlton will retire in 40 years. His retirement goal is $4,000,000. He opened a Fidelity a...
Carlton will retire in 40 years. His retirement goal is $4,000,000. He opened a Fidelity a single amount today in an SP500 index. His financial advisor Jordan, informed xpected return of 11.4\% . How much should he invest today to meet his goal?
You wish to retire in 30 years with retirement savings equal to $750,000. How much should...
You wish to retire in 30 years with retirement savings equal to $750,000. How much should you put away each month if the annual interest rate is 9.75%? Round to the nearest 0.01.
Sandeep wants to retire in 15 years and he needs to have $60,000 for a down payment on his retirement home.
Sandeep wants to retire in 15 years and he needs to have $60,000 for a down payment on his retirement home. If he makes quarterly payments into an account paying 7% annual interest compounded quarterly, how much should he deposit each quarter to obtain the desired down payment?
How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal?
Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $60,000 has today. (The real value of his retirement income will decline annually after he retires.) Hisretirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional...
You have decide to retire in 20 years and you want to have $2,000,000 e in...
You have decide to retire in 20 years and you want to have $2,000,000 e in the bank when you retire. You currently have $50,000 k. in the bank. The bank pays 4.00% interest compounded yearly. How much money do you need to deposit in your bank account each year in order to meet your retirement goal?
You want to start saving for retirement. Your goal is to retire in 25 years. Assume...
You want to start saving for retirement. Your goal is to retire in 25 years. Assume that you have $25,000 to invest now and that you will contribute $4,800 per year. What will your account be worth when you retire if you can earn 6% a year? What will your account be worth if the 6% annual return is compounded monthly and instead of contributing $4,800 per year, you contribute $400 monthly (you still start with $25,000) Assume all payments...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire at the age of 65. He already has $5000 in his savings that he received as a gift from his mother. He plans to save some of his income each year during his working years and he plans to increase his savings at a constant 5% each year. He wants to be able to spend $100.000 for 20 years after his retirement and at...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire at the age of 65. He already has $5000 in his savings that he received as a gift from his mother. He plans to save some of his income each year during his working years and he plans to increase his savings at a constant 5% each year. He wants to be able to spend $100,000 for 20 years after his retirement and at...
You plan to retire in exactly 20 years. Your goal is to create a fund that...
You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the next 30 years between retirement and death (a psychic told you that you’d die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period. Required: d. Now assume that you will earn 10% from now through the...
Colin is 40 years old and wants to retire in 27 years. His family has a...
Colin is 40 years old and wants to retire in 27 years. His family has a history of living well into their 90s. Therefore, he estimates that he will live to age 95. He currently has a salary of $150,000 and expects that he will need about 75% of that amount annually if he were retired. He can earn 8 percent from his portfolio and expects inflation to continue at 3 percent. Some years ago, he worked for the government...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT