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
employer. You can roll that money into the retirement plan of the
new employer. You will also contribute $6,800 each year into your
new employer’s plan. If the rolled-over money and the new
contributions both earn a return of 6 percent, how much should you
expect to have when you retire in 30 years?
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 $155,000 in the retirement plan from your former
employer. You can roll that money into the retirement plan of the
new employer. You will also contribute $7,700 each year into your
new employer’s plan.
If the rolled-over money and the new contributions both earn a
return of 6 percent, how much should you expect to have when you
retire in 30 years?
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
new job. You have $83,000 in the retirement plan from your former
employer. You can roll that money into the retirement plan of the
new employer. You will also contribute $3,900 each year into your
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...
Consider that you are 40 years old and have just changed to a
new job. You have $141,000 in the retirement plan from your former
employer. You can roll that money into the retirement plan of the
new employer. You will also contribute $6,300 each year into your
new employer’s plan.
If the rolled-over money and the new contributions both earn an
7 percent return, how much should you expect to have when you
retire in 25 years? (Do...
Consider that you are 45 years old and have just changed to a new job. You...
Consider that you are 45 years old and have just changed to a
new job. You have $159,000 in the retirement plan from your former
employer. You can roll that money into the retirement plan of the
new employer. You will also contribute $8,100 each year into your
new employer’s plan. If the rolled-over money and the new
contributions both earn an 8 percent return, how much should you
expect to have when you retire in 20 years? (Do not...
You just finished calculating the NPV of project A and found it to be $49,242. A...
You just finished calculating the NPV of project A and found it
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
$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...
You just finished calculating the NPV of project A and found it to be $49,242. A...
You just finished calculating the NPV of project A and found it
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
$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...
You just finished calculating the NPV of project A and found it to be $49,242. A...
You just finished calculating the NPV of project A and found it
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
$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...
Problem 39: You have just turned 30 years old, have just received your MBA, and have...
Problem 39:
You have just turned 30 years old, have just received your MBA,
and have accepted your first job. Now you must decide how much
money to put into your RRSP. Your RRSP works as follows: Every
dollar in the plan earns 7% per year. You cannot make withdrawals
until your 65th birthday. After that point, you can make
withdrawals as you see fit. You decide that you will plan to live
to 100 and work until you turn...
Individual A just turned 30 years old, have just received your MBA, and have accepted your...
Individual A just turned 30 years old, have just received your
MBA, and have accepted your first job. He must decide how much
money to put into its retirement plan. The plan works as follows:
Every dollar in the plan earns 7% per year. You cannot make
withdrawals until he retires on his sixty-fifth birthday. After
that point, individual A can make withdrawals as he sees fit.
Individual A decides that he will plan to live to 100 and work...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Suppose you want your daughter’s college fund to contain $125,000 after 14 years. If you can...
- an investment pays 2600 per year for the first 7 years, 5200 per year for the...
- Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the...
- C++ How would I sort my output to evaluate it by sorting the column by it's...
- A cake is shaped like a hemisphere of radius 2 with its base on the xy-plane....
- Explain the similarities and differences between spiders, crawlers and bots in relation to search engines. Additionally...
- ] How much weight do you have to invest in KLM in order to earn the...
ADVERTISEMENT