I plan to retire in 40 years and live 30 years after retiring.•After retirement I...

I plan to retire in 40 years and live 30 years after retiring. •After retirement I want to be able to withdraw $30,000 each year. •The annual interest rate is 8%.•How much do I need to save each year in the next 40 years? How would you do this on a BAII Plus Calculator?

Expert Solution

This is two step problem
Step - 1 Present value of withdrawal

we have to use financial calculator to solve this
Put in calculator

FV		0
PMT		-30000
I		8%
N		30

Compute PV		$337,733.50


Step 2 - Computation of annual contribution
Put in calculator

FV		$337,733.50
PV		0
I		8%
N		40

compute PMT		($1,303.71)

Ans =		$1,303.71

jeff jeffy answered 2 years ago

A woman plans to retire in 40 years, and she expects to live for 30 years...

A woman plans to retire in 40 years, and she expects to live for 30 years after that. She wants to spend 10,000 a month after she retires. To finance her retirement she is going to invest monthly (with her investment one month from know) over 40 years at 12.6%. After she retires she will move her investment to a more liquid account earning 7.2% a year. Ignore taxes and transaction costs. How much does she have to sabe a...

A couple will retire in 40 years; they plan to withdraw $39,000 a year in retirement,...

A couple will retire in 40 years; they plan to withdraw $39,000 a year in retirement, and they will make 20 withdraw. They believe that they can earn 8% interest on the retirement savings. - If they make annual deposit into their retirement savings, how much will they need to save each year? Assume the first deposit comes at the end of the first year, and the first withdraw comes at the end of year 41.

You plan on retiring in 30 years and want to have $3,000,000 saved in your retirement...

You plan on retiring in 30 years and want to have $3,000,000 saved in your retirement account. You will earn an average rate of return of 6% on your investments. How much will you need to invest each month in order to get to your goal.

You are planning to retire in twenty years. You'll live ten years after retirement. You want...

You are planning to retire in twenty years. You'll live ten years after retirement. You want to be able to draw out of your savings at the rate of $10,000 per year. How much would you have to pay in equal annual deposits until retirement to meet your objectives? Assume interest remains at 9%.

You plan to retire in 40 years. After that, you want to receive an annuity of...

You plan to retire in 40 years. After that, you want to receive an annuity of 5000 per month for 25 years, beginning immediately upon retirement. If you can earn 6% per year, compounded monthly, how much must you invest at the end of each month before retirement?

3. You plan to retire in 40 years. Upon retirement, you plan to spend US$40,000.00 per...

3. You plan to retire in 40 years. Upon retirement, you plan to spend US$40,000.00 per year for 30 years. a. At a discount rate of 7.00% per year, how much do you need to have saved up in 40 years if you are to meet up with your retirement objectives? b. Using the answer to part (a) and a compound rate of 8.00%, how much would you have to save yearly for the next 40 years if you are...

Suppose you are 30 years old. You plan to retire at age 67 and live forever...

Suppose you are 30 years old. You plan to retire at age 67 and live forever (Ok 100 years old). You want to be able to withdraw $100,000 per year during your retirement. Assume that you will earn a starting salary of $50,000, which will grow at a 2% annual rate. Your employer contributes 5% of your annual salary to your retirement fund. Further assume that your retirement fund will be invested in a basket of well diversified indices that...

You plan to work for another 30 years at which point you plan to retire, after...

You plan to work for another 30 years at which point you plan to retire, after which you expect to live for another 30 years. During your retirement, you plan to make annual withdrawals at the beginning of each year where each withdrawal should have the same purchasing power as $100,000 today. You would also like to provide a bequest to your children (paid when you die) that has the same purchasing power as $1 million today. To provide for...

Suppose you want to retire after working for 40 years with $2 million saved for retirement....

Suppose you want to retire after working for 40 years with $2 million saved for retirement. Calculate how much you need to save each month if your retirement savings is in an account that grows at 3%, 6%, and 9% interest annually. (three answers, one for each rate.) Show your work.

Suppose you are 40 years old and plan on retiring in 25 years, and then living...

Suppose you are 40 years old and plan on retiring in 25 years, and then living for another 15 years after retirement. Your current income is $70,000 per year. If you pay $3,000 in Social Security taxes each year, how much do you need to save per year in order to have enough to replace 75% of your preretirement income at retirement when combined with Social Security

Question