Question

In: Finance

3. You want to save enough money to retire as a millionaire. (Age now is 30)...

3. You want to save enough money to retire as a millionaire. (Age now is 30)

a. If you could earn 10% with common stocks, how much would you have to set aside per year to have $1,000,000 when you are 65?

b. If you were going to make deposit monthly, how much would you have to set aside per month to have $1,000,000 when you are 65?

c. What type of a problem is this?

Expert Solution

a. If you could earn 10% with common stocks, how much would you have to set aside per year to have $1,000,000 when you are 65?

n = 65 - 30 = 35

We should set aside $3,689.7051198926 per year

b) If you were going to make deposit monthly, how much would you have to set aside per month to have $1,000,000 when you are 65?

n = (65 - 30) * 12 = 420 monthly payments

r = 0.10/12 = 0.008333333333 monthly rate

We must set aside $263.3909228272 every month

c) This is a type of annuity problem

jeff jeffy answered 1 year ago

You are 30 years old and want to retire at the age of age 65 and...

You are 30 years old and want to retire at the age of age 65 and expect to live another 25 years. On the day you retire, you want to have $900,000 in your retirement savings account. a) If you invest monthly starting one month from today and your investment earns 6.0 percent per year, How much money do you need to invest every month until you retire? b) You're retired with $900,000 and you have 25 more years. You...

You plan to retire at the age of 60. You are now 30 and plan to...

You plan to retire at the age of 60. You are now 30 and plan to save $8,000 per year for retirement, with the first deposit made one year from today. Your mutual fund account offers you 10% of return each year. You expect to live on your retirement fund till age 90 after retirement. Calculate total amount available for retirement at the age of 60. $1,365,510 $1,417,088 $1,315,952 $1,258,146

You have decided that you want to be a millionaire when you retire in 44 years....

You have decided that you want to be a millionaire when you retire in 44 years. 1. .If you can earn an annual return of 11.22 percent, how much do you have to invest today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 2. .What if you can earn an annual return of 5.61 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 1. amount to...

If you want to be a millionaire when you retire in 50 years, how much must...

If you want to be a millionaire when you retire in 50 years, how much must you save each month if you can earn a 6% annual rate of return? what is the effective annual interest rate on the imvestment? please use formula and show work

You just turned 30 and decide that you would like to save up enough money so...

You just turned 30 and decide that you would like to save up enough money so as to be able to withdraw $75,000 per year for 20 years after you retire at age 65, with the first withdrawal starting on your 66th birthday. How much money will you have to deposit each month into an account earning 8% per year (interest compounded monthly), starting one month from today, to accomplish this goal? If possible, I want to see full math...

How much money do you need to save each year to be a millionaire by the...

How much money do you need to save each year to be a millionaire by the time you are 65 if you can earn an interest rate of 8% and you start saving when you were born? Please use two decimals rounded up.

You want to be a millionaire when you retire in 35 years. How much do you...

You want to be a millionaire when you retire in 35 years. How much do you have to save each month if you can earn an annual return of 11.5 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Savings per month $ How much do you have to save each month if you wait 15 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2...

You now realize you would like to retire in 30 years (age 60). You are currently...

You now realize you would like to retire in 30 years (age 60). You are currently making $90K a year. After your life expenditure and taxes, you are able to save 10% of your salary. You come from a family with really good genes so you expect to live another 25 years after retirement (to an age of 85 years old). You do not want to be a burden on your family and it’s not likely there will be any...

11.You want to be a millionaire when you retire in 40 years. a. How much do...

11.You want to be a millionaire when you retire in 40 years. a. How much do you have to save each month if you can earn an annual return of 9.7 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much do you have to save each month if you wait 10 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2 decimal places,...

1. How much money do you need to save each year to be a millionaire by...

1. How much money do you need to save each year to be a millionaire by the time you are 65 if you can earn an interest rate of 8% and you start saving when you are 20 years old? Please use two decimals rounded up/down. 2. How much money do you need to save each year to be a millionaire by the time you are 65 if you can earn an interest rate of 8% and you start saving...