Question
In: Finance
You are 35 years old. You have just finished your B.A studies and found a new...
You are 35 years old. You have just finished your B.A studies and found a new and rewarding job. You decided that it is time to set up a retirement plan. You estimate that you can deposit $1,000 in real terms each month until your retirement. You want to retire at the age of 60. You contacted a retirement agent and received the following offer: an inflation-linked plan (a real plan) that pays an annual stated real interest rate of 4.8%. Assume that the annual expected inflation is 2.43% (for the entire period).
1. According to the data you have, how much money, in real terms, will you have in your retirement plan once you retire?
2. According to the data you have, can you estimate how much money, in nominal terms (in cash), will you have in your retirement plan once you retire?
3. Assuming that the actual inflation is the same as expected one, what is your 60th nominal contribution to the retirement plan (the amount you deposit at the end of year five, in cash)?
4. You estimate that you will live until the age of 90. How much money, in real terms, will you be able to withdraw each month from the age of 60 until the age of 90?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Consider that you are 35 years old and have just changed to a new job. You...
Consider that you are 35 years old and have just changed to a
new job. You have $146,000 in the retirement plan from your former
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Problem 4 and 5-1 Future Value Consider that you are 35 years old and have just...
Problem 4 and 5-1 Future Value
Consider that you are 35 years old and have just changed to a
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new employer’s plan.
If the rolled-over money and the new contributions both earn a 7
percent return, how much should you expect to have when...
Consider that you are 40 years old and have just changed to a new job. You...
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If the rolled-over money and the new contributions both earn an
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resources as project A is now before you as well. This is project
B, which will require a $2M investment in an asset that will have a
$1M salvage value at the end of the project. A total of $170,000
was invested in the consulting and research leading to the
marketability of the product. Project B will...
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to be $49,242. A concurrent project, which will use the same
resources as project A is now before you as well. This is project
B, which will require a $2M investment in an asset that will have a
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Problem 39: You have just turned 30 years old, have just received your MBA, and have...
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