Question

PLEASE ANSWER ALL

#1

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 72.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 72.0 when he fully retires, he will wants to have $2,800,968.00 in his retirement account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 4.00% interest rate.

Answer format: Currency: Round to: 2 decimal places.

#2

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 72.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 72.0 when he fully retires, he will begin to make annual withdrawals of $103,198.00 from his retirement account until he turns 92.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 10.00% interest rate.

#3

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 70.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 70.0 when he fully retires, he will begin to make annual withdrawals of $102,420.00 from his retirement account until he turns 93.00. After this final withdrawal, he wants $1.84 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate.

Answer format: Currency: Round to: 2 decimal places.

#4

A bank offers 8.00% on savings accounts. What is the effective annual rate if interest is compounded semi-annually?

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal

Answer 1

We can calculate the contribution required as follows:

A) Amount required on 73rd Birthday exactly 1 year after his 72nd birthday = $ 2,800,968

Contribution Start year = 26 year

Contribution End year = 65 year

Rate of Interest = 4%

Formulas used in excel sheet are:

So, the contribution required is $ 21,537.80

As there are multiple questions asked, I have solved the first one. Please post the question separately for rest ones to be answered. Hope it helps you !!