Question

In: Accounting

Ayman has Been working with an ABC he retired today after 30years and the company was ...

Ayman has Been working with an ABC he retired today after 30years and the company was Saving $ 300 monthly for the first 10 years and500 monthly for the next 20 years the interest rate was 6% compounding monthly for the first 5 years and 4% after that . Ayman today is 65 years old . It is planing to start withdrawal next month.
1- if ayman withdrawal 1000 monthly how much will be left when he is 80 years old
2. Suppose Ayman needs $ 2,500 a month, how many he withdraw can he make.

Expert Solution

Hi,

Here are the answers with workings.

Answer 1. If Ayman withdraws $1000 per month, he will be left with $163,004.51 when he is 80 years old.( That is 15 years from now or 180 months from now)

Answer 2: If Ayman needs $2500 per month he will be able to withdraw for 106 months.

Note: It is assumed that the corpus of $224,990.26 is reinvested again at 4% compounding interest (less $ 1000 per month or $2500 pr month as the case may be )

Here are the workings.

To calculate the corpus(Total fund accumulated for 30 years) , first 5 years it earns interest at 6% compounded monthly for a monthly investment of $ 300 per month and next 5 years at 4% for $300 invested and remaining 20 years at 4% for a montly investment of $ 500.

Using the FV(Future value) formula in excel, we can calculate the corpus as under.

Corpus accumulated is as under

Here are the excel workings in Excel file

Q# 2 Workings.

Hope this is useful.

All the Best.

ekkarill92 answered 1 year ago

Penny has recently retired after working as a lawyer for 30 years. However, to keep herself...

Penny has recently retired after working as a lawyer for 30 years. However, to keep herself active and also to earn some money for holidays she is planning to sell cup-cakes at the Farmers Market held in her locality every Saturday. Penny inherited a unique recipe for cakes from her grandmother and believes her cakes will hit the market. Penny is looking forward to a relatively quiet lifestyle aims to minimise paperwork or legal complexities. Advise the most appropriate business...

Todd has been working on a tax research question for a client. He knows he will...

Todd has been working on a tax research question for a client. He knows he will be referring the issue to the client’s CPA and attorney, but he wanted to give the client some general information about how the issue could be handled and they wanted to discuss it together. Todd has found several private letter rulings, one court case, and a revenue ruling, all from 1980 or earlier that are contrary to what his client is trying to do....

Mr T is a 67 year old retired Navy veteran. He has been taking simvastatin for...

Mr T is a 67 year old retired Navy veteran. He has been taking simvastatin for 2 years to treat elevated cholesterolemia. During a recent visit to a 24 hour acute care clinic in a local mall he was prescribed clarithromycin for an acute sinus infection.Two days later Mr T arrives in the emergency room complaining of generalized muscle pain, muscle weakness and dark colored urine. Tests revealed myoglobin in the urine and a serum creatinine of 186 micromol/l (usual...

Johnny Minor is 16 years old and he has been working odd jobs since he was...

Johnny Minor is 16 years old and he has been working odd jobs since he was about 10. Being unusually industrious, and having inherited some money from an uncle he never knew, he has managed to save enough money to buy the used car of his dreams, which happens to be a classic 1980 Porsche 911 Targa. This particular Porsche model is unusual in that it tends to appreciate in value rather than losing value by the minute. Collectors will...

Timothy has been working as a senior accountant in Dell Headquarter for 10 years. He has...

Timothy has been working as a senior accountant in Dell Headquarter for 10 years. He has multitude of responsibilities, including:  Examining bank statements and reconciling them with general ledger entries  Examining expenses submitted by employees  Keeping an eye on incoming payments from accounts receivable and outgoing payments from accounts payable  Creating company financial reports with the above information included  Analysing data collected in order to determine the state of the company’s financial health  Leading...

Mr. Bud. He is a construction worker that has been working on the Cape Cod Canal...

Mr. Bud. He is a construction worker that has been working on the Cape Cod Canal for the past ten years. He has been working outdoors in the direct sunlight where the temperature is 95 degrees Fahrenheit and humidity is 80%. He's sitting at the bar at 4 PM drinking 16 oz. Bud Lite beers with an equal number of bourbon shots. He's not eating the salty bar snacks because he is watching his weight although he's on his third...

Doug Klock, 56, just retired after 31 years of teaching. He is a husband and father...

Doug Klock, 56, just retired after 31 years of teaching. He is a husband and father of three children, two of whom are still dependent. He received a $154 comma 000 lump-sum retirement bonus and will receive $2 comma 500 per month from his retirement annuity. He has saved $ 145 comma 000 in a 403(b) retirement plan and another $97 comma 000 in other accounts. His 403(b) plan is invested in mutual funds, but most of his other investments...

Doug Klock, 56 just retired after 31 years of teaching. He is a husband and father...

Doug Klock, 56 just retired after 31 years of teaching. He is a husband and father of three children, two of whom are still dependent. He received a $140,000lump-sum retirement bonus and will receive 2,700 per month from his retirement annuity. He has saved $151,000 in a 403(b) retirement plan and another$93,000 in other accounts. His 403(b) plan is invested in mutual funds, but most of his other investments are in bank accounts earning 2 or 3 percent annually. Doug...

The accountant of ABC Company has the following maintenance costs and working hours for the past...

The accountant of ABC Company has the following maintenance costs and working hours for the past five months and trying to separate the cost to its components: Month Cost Working hours March $100,000 5,000 April 60,000 1,000 May 68,600 2,000 June 83,450 3,420 July 88,000 5,250 The equation to predict the maintenance cost is [[selectone]] a. Y=38,000+16X b. Y=40,000+10X c. Y=50,000+10X d. Y=40,000+12X

Siddhartha has 50 hours per week to devote to work or leisure. He has been working...

Siddhartha has 50 hours per week to devote to work or leisure. He has been working for $8 per hour, but now that he has finished an introductory economics class, his earning power has shot up to $16 per hour. Based on the information in the table below, calculate his original utility-maximizing choice and his utility-maximizing choice after the wage increase. Hours of Leisure Total Utility from Leisure Income Total Utility from Income 0 — 0 — 10 200 80...