I have $400,000 in the bank now. I plan to withdraw $20,000 at
the end of...
I have $400,000 in the bank now. I plan to withdraw $20,000 at
the end of this year. Each subsequent end of year withdrawal will
increase by 8%. If I earn 10% per year on my investments in the
first 3 years, then 5% per year in the next 2 years, and 4% per
year in the following 3 years,
Determine how much money I will have at the end of 8
years.
Determine the initial withdrawal amount at the end of this year
that will leave me with no money at the end of 8 years using either
Solver or Goal Seek.
Solutions
Expert Solution
So Amount at the end of 8 years = $
392,594.18
b)
Using goal seek
So, Initial Withdrawal amount has to be $ 49,334.37 for
the money be 0 at the end of 8 years.
I have $500,000 in the bank now. I plan to withdraw $30,000 at
the end of this year. Each subsequent end of year withdrawal will
increase by 7%. If I earn 8% per year on my investments in the
first 4 years, then 6% per year in the next 3 years, and 5% per
year in the following 4 years,
Determine how much money I will have at the end of 11
years.
Determine the initial withdrawal amount at the...
I want to retire in 40 years. When I retire, I want to withdraw
$20,000 every 6 months from my savings for a period of 10 years.
However, at the end of years two and three in my retirement, I will
need to spend $40,000 and $60,000 respectively to send my grandson
to culinary school. Assuming I can earn 4% compounded
semi-annually, answer the following question:
How much money will I need at year 40 to fund sending my
grandson...
You want to withdraw $19883 two years from now. Calculate the
amount of end-of-period bi-weekly payments that you need to make,
if the (nominal) interest rate is 1.5% per year. Assume bi-weekly
compounding.
How much money will I need to have at retirement so I can
withdraw $60,000 a year for 20 years from an account earning 8%
compounded annually? a. How much do you need in your account at the
beginning? b. How much total money will you pull out of the
account? c. How much of that money is interest?
Suppose you have $800,000 in your savings account when you
retire. Your plan is to withdraw $6,000 a month as retirement
income from this account. You expect to earn annual interest of 6
percent, compounded monthly, on your money during your retirement.
How many months can you be retired until you run out of money?
a.
285.14
b.
210.83
c.
262.59
d.
220.27
The dividends paid by a corporation
a.
are tax-deductible, i.e., reduce the taxable income of the
corporation...
You consider a new piece of equipment that will cost $400,000,
and will require $20,000 for shipping and installation. NWC will
increase immediately by $25,000. The project will last 3 years and
the equipment has a 5 year class life. Revenues will increase by
$220,000/year, and defect costs will decrease by $220,000/year.
Operating costs will increase by $30,000/year. The market value of
the equipment after year 3 is $200,000. The cost of capital is 12%;
marginal tax rate is 30%....
I am currently 25 years old. I have $20,000 invested in a
brokerage account that I expect to give me a return of 8%
compounded semi-annually. I am planning to work until I am 60 and
put some money away monthly in a saving account that gives me a
return of 2.05% compounded daily (First payment will be one month
from now and last payment will be the month I retire. You can
assume I turned 25 today. Also, assume...
5. You plan to deposit $500 into a bank account now (year 0),
$300 in year 2, and $1000 in year 4. How much money will be in your
account in year 7, if the annual interest rate is 5%?
a. 2,345
b. 2,244
c. 2,175
d. 2,500
6. If the interest rate is 6.5%, calculate the present value of
$5000 paid annually over the next 25 years
a. 69,899
b. 65,798
c. 60,898
d. 60,989
You have
$20,000. You plan on purchasing a house in one year, but you will
need to have $22,500 for the downpayment. Which of the following is
a good investment opportunity to ensure you have the money
necessary to make your downpayment in a year?
A portfolio with an
expected return of $24,000 and a standard deviation of 10%.
A portfolio with an
expected return of $30,000 and a standard deviation of 15%.
All of these options
would be a...
You plan to open a bank account by depositing $500 today and end
of each year for the next nine years (year 1, year 2, ……. year 9).
If the interest rate is 2%, what will be your balance in ten years?
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