Question
In: Accounting
A worker aged 35 wishes to accumulate a fund for retirement by depositing $1, 000 at...
A worker aged 35 wishes to accumulate a fund for retirement by depositing $1, 000 at the beginning of each month for 30 years. Starting at age 65 the worker plans to make 15 annual withdrawals at the beginning of each year. Assume that all payments are certain to be made. If the annual effective rate of interest is 6% during the first 30 years but only 4% thereafter,
find:
(a) the value of the fund at age 65.
(b) the amount of each withdrawal starting at age 65.
(c) how much total interest will s/he earn throughout the 45-year span? [2 marks]
Solutions
ekkarill92 answered 2 years agoRelated Solutions
A worker age 45 wishes to accumulate a fund for retirement by depositing $2,500 at the...
A worker age 45 wishes to accumulate a fund for retirement by
depositing $2,500 at the beginning of each year for 20 years.
Starting at age 65 the worker plans to make 20 annual withdrawals
at the beginning of each year. Assuming all payments are certain to
be made, find the amount of each withdrawal starting at age 65 to
the nearest dollar, if the effective rate of interest is 9% during
the first 20 years but only 8% thereafter.
Part One 1. [Time Value of Money] David, aged 30, wishes to accumulate a college fund...
Part One
1. [Time Value of Money] David, aged 30, wishes to accumulate a
college fund for his newborn baby (age 0). Assuming that his baby
will need 20,000 each year for four years starting the beginning of
his age 18 for college, how much money he needs to put aside right
now? If David does not have that amount of money right now, but he
can save certain amount of money at the end of each year, how much...
A wishes to accumulate exactly $15,000 in a fund that credits interest at a nominal annual...
A wishes to accumulate exactly $15,000 in a fund that credits
interest at a nominal annual rate of 6% compounded semiannually. A
makes annual deposits of $1,000 at the beginning of each year into
the fund, plus a final smaller deposit one year after the last
$1,000 deposit. In which of the following ranges is the amount of
the final deposit?
Gary decides to set up a retirement fund by depositing $154 at the end of each...
Gary decides to set up a retirement fund by depositing $154 at
the end of each week for 11 years. How much will he have after 11
years, if the interest rate is 2.46%, compounded semiannually?
(Please use formula and show ALL Step-by-Step NOT excel) (Can it be
solved using a financial calculator)
Sara decides to set up a retirement fund by depositing $21 at the end of each...
Sara decides to set up a retirement fund by depositing $21 at
the end of each day for 13 years. How much will she have then, if
the interest rate is 7.18% compounded weekly and her account starts
with $17223 already deposited? (Use formula show all Step-by-Step
NOT excel)
XERCISE 1: You want to accumulate a 200.000 euros retirement fund and you plan to make...
XERCISE 1:
You want to accumulate a 200.000 euros retirement fund and you
plan to make the first deposit on March 1, 1984 and the last on
September 1, 2005. Find the size of each deposit, if he makes the
deposits
(a) semi-annually in a fund that pays 12.5% per annum compounded
semi-annually
(b) monthly in a fund that pays 12.5 % per annum compounded
monthly.
EXERCISE 2:
Your friend makes regular deposits of 500$ at the end of each...
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Sunrise Industries wishes to accumulate funds to provide a
retirement annuity for its vice president of research, Jill Moran.
Ms. Moran, by contract, will retire at the end of exactly 12 years.
Upon retirement, she is entitled to receive an annual end-of-year
payment of $42,000 for exactly 20 years. If she dies prior to the
end of the 20-year period, the annual payments will pass to her
heirs. During the 12-year “accumulation period,” Sunrise wishes to
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Obrien Group wishes to accumulate funds to provide a retirement annuity for its Director of Research,...
Obrien Group wishes to accumulate funds to provide a retirement
annuity for its Director of Research, Peter Alexander; Mr.
Alexander by contract will retire at the end of exactly 12 years.
On retirement, he is entitled to receive an annual end-of-year
payment of $42,000 for exactly 20 years. If he dies prior to the
end of the 20-year period, the annual payments will pass to his
heirs. During the 12-year 'accumulation period', Obrien wishes to
fund the annuity by making...
Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of...
Sunrise Industries wishes to accumulate funds
to provide a retirement annuity for its vice president of
research, Jill Moran. Ms. Moran, by contract, will retire at the
end of exactly 12 years. Upon retirement, she is entitled to
receive an annual end-of-year payment of $ 42,000 for exactly 20
years. If she dies prior to the end of the 20-year period, the
annual payments will pass to her heirs. During the 12 year
"accumulation period," Sunrise wishes to fund the...
Bella Inc. wishes to accumulate funds to provide a retirement annuity for its Vice President of...
Bella Inc. wishes to accumulate funds to provide a retirement
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Cullen by contract will retire at the end of exactly 20 years. On
retirement, he is entitled to receive an annual end-of-year payment
of $35,000 for exactly 30 years. If he dies prior to the end of the
30-year period, the annual payments will pass to his heirs. During
the 20-year ‘accumulation period’, Bella Inc. wishes to fund the
annuity...
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