Question
In: Accounting
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire...
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire at the age of 65. He already has $5000 in his savings that he received as a gift from his mother. He plans to save some of his income each year during his working years and he plans to increase his savings at a constant 5% each year.
He wants to be able to spend $100.000 for 20 years after his retirement and at the end he wants $300.000 savings to donate his favorite charity. Retirement spending must increase and cover 2% annual inflation as well.
He expects to make 5% return on his savings during working years and 4% after retirement. Assume cash flows occur at the end of the year.
Calculate the saving amount in the first year of working for Joe.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Your cousin Joe at age 25 wants to plan for his retirement and estimates to retire...
Your cousin Joe at age 25 wants to plan for his retirement and
estimates to retire at the age of 65. He already has $5000 in his
savings that he received as a gift from his mother. He plans to
save some of his income each year during his working years and he
plans to increase his savings at a constant 5% each year.
He wants to be able to spend $100,000 for 20 years after his
retirement and at...
Suppose you are just starting your retirement savings at age 25, and plan to retire at...
Suppose you are just starting your retirement savings at age 25,
and plan to retire at age 70. Your goal is to save a million
dollars in your IRA and you believe you can earn a 7% rate of
return on your investment. How much must you contribute to your IRA
each year to meet your goal?
Select one:
a. $22,222
b. $3,500
c. $619
d. $21,881
You begin saving for retirement at age 25, and you plan to retire at age 60....
You begin saving for retirement at age 25, and you plan to
retire at age 60. You want to deposit a certain amount each month
into an account that pays an APR of 3% compounded monthly. Make a
table that shows the amount you must deposit each month in terms of
the nest egg you desire to have when you retire. (Round your
answers to the nearest cent.)
Nest egg size
Needed deposit
$100,000
$
$200,000
$
$300,000
$
$400,000...
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20
Your retirement will last 25 years starting in year 21
You want to have $50,000 each year of your retirement.
How much would you have to invest each year, starting in one year,
for 15 years , to exactly pay for your retirement ,if your
investments earn 6.00% APR (compounded annually)?
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20
Your retirement will last 25 years starting in year 21
You want to have $50,000 each year of your retirement.
How much would you have to invest each year, starting in one year,
for 15 years , to exactly pay for your retirement ,if your
investments earn 6.00% APR (compounded annually)?
Answers:
$21,349
$21,546
$20,930
$20,520
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20 Your retirement will last 25 years
starting in year 21 You want to have $50,000 each year of your
retirement. How much would you have to invest each year, starting
in one year, for 15 years , to exactly pay for your retirement ,if
your investments earn 6.00% APR (compounded annually)? a. 21.,349
b. 21, 546 c. 20,520 d. 20,930
Cathy Kung, 25, plans to retire at the age of 65. She estimates that she will...
Cathy Kung, 25, plans to retire at the age of 65. She estimates
that she will need $50,000 in the first year of her retirement, and
this post-retirement expenditure will increase at the rate of
inflation of 2% per year. Based on her family history, she does not
expect to live beyond the age of 90. After retirement, she will
invest her money in bank deposits with an expected rate of return
of 4% per year. Her post-retirement marginal tax...
Cathy Kung, 25, plans to retire at the age of 65. She estimates that she will...
Cathy Kung, 25, plans to retire at the age of 65. She estimates
that she will need $50,000 in the first year of her retirement, and
this post-retirement expenditure will increase at the rate of
inflation of 2% per year. Based on her family history, she does not
expect to live beyond the age of 90. After retirement, she will
invest her money in bank deposits with an expected rate of return
of 4% per year. Her post-retirement marginal tax...
At the age of 30, Morgan decided to create a financial plan to retire in 25...
At the age of 30, Morgan decided to create a financial plan to
retire in 25 years. He had the following retirement objectives:
■ Home purchase objective: Own a home worth at least $1,200,000
with no mortgage.
■ Vacation objective: Have an amount of $45,000 for a European
tour.
■ Monthly allowance objective: Receive a month-beginning
allowance of $2000 for 20 years after retirement.
He created the following financial plans to achieve the above
retirement objectives. Answer the questions related...
a. You are currently 25 and plan to retire at age 65. You think you will...
a. You are currently 25 and plan to retire at age 65. You think
you will need $150,000 per year during your retirement years. You
assume that you will live until age 90. You also want to leave
$1,000,000 to Wingate University when you die at age 90. You expect
to get a 6% rate on your investments. How much do you need to have
in your account at retirement?
If you start saving now at age 25, how much...
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