Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $4,000 per year for her retirement fund and assumes that she'll retire at age 65.a. How much will Molly have accumulated when she turns 65 if she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar.$b. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 40. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar.Nest egg amount at 6% = $Nest egg amount at 8% = $

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Answered: Molly Lincoln, a 25-year-old personal…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $3,500 per year for her retirement fund and assumes that she'll retire at age 65. How much will Molly have accumulated when she turns 65 if she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 45. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. 2a. Nest egg at 4% 2b. Nest egg at 8%
Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $4,000 per year for her retirement fund and assumes that she'll retire at age 65. How much will Molly have accumulated when she turns 65 if she invests in equities and earns 10 percent on average? Round your answer to the nearest dollar. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 40. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. 2A. Nest egg amount at 4% 2B. Nest egg amount at 10%
A 40-year-old woman decides to put funds into a retirement plan. She can save $3,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.$ At retirement how much can she withdraw each year for 25 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Appendix C
Marisa Gale, a 30-year-old personal loan officer at Second National Bank, understands the importance of starting early when it comes to saving for retirement. She has designated $2,500 per year for her retirement fund and assumes she'll retire at age 65. QUESTION. NO 1.How much will she have if she invests in CDs and similar money market instruments that earn 4 percent on average? Round your answer to the nearest dollar. NO 2.How much will she have if instead she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar. NO 3. Marisa is urging her friend, Nolan Ransom, to start his plan right away because he's 35. What would his nest egg amount to if he invested in the same manner as Marisa and he, too, retires at age 65? Round your answer to the nearest dollar. Nest egg amount at 4% = Nest egg amount at 8% =
Jackie is 34 years old. She would like to have $850,000 in her retirement account when she is 65 years old. Show work and write your answer in a complete sentence.a. How much would she need to deposit every month into an account with a 7.25% interest rate?b. If she had started the account at the age of 21 with the same interest rate, how much would she need to deposit every month to achieve her goal?c. How much would she need to deposit as a lump sum (principal) at age 21 with the same interest rate (without making another payment) to have a million dollars at age 65
A client needs assistance with retirement planning. Here are the facts: The client, Dave, is 21 years old. He wants to retire at 65. Dave has disposable income of $2,000 per month. The IRA Dave has chosen has an average annual return of 8%. Question 1. If Dave contributes half of his disposable income to the account, what will it be worth at 65? Question 2. How much would he need to contribute to have $5,000,000 at 65?
This is a classic retirement problem. A time line will help in solving it. Your friend is celebrating her 35th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $80,000 from her savings account on each birthday for 15 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in the local credit union, which offers 9 percent interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund. If she starts making these deposits on her 36th birthday and continues to make deposits until she is 65 (the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals at retirement? Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum…
Your friend has just celebrated her 30th birthday and accepted her first job. She must now decide how much money to put into her retirement plan. Assume that every dollar in the plan is expected to earn a return of 8% p.a. and that your friend cannot make any withdrawals until she retires on her 65th birthday. After that point, she can make withdrawals as she wishes. She plans to live to 100 years and she plans to work until she turns 65. She estimates that to live comfortably in retirement, she will need $120,000 every year starting at the end of the first year of retirement and ending on her 100th birthday. Assume that she starts the contribution to her retirement plan on her 31st birthday and that she will contribute the same amount to the plan at the end of every year that she works. The amount of money she would need to contribute every year to fund her retirement is closest to: a. $7,475. b. $8,116. c. $8,207. d. $8,817.
Maria, a 25-year-old teacher, wants to start saving for her retirement. Maria wants a comfortable retirement, so she needs to have one million dollars in her saving account, which pays 4.8% annual interest rate, when she reaches 65 years of age. ) How much should Maria deposit into her saving account monthly now? Round your answer to the nearest cent. a. ) If Maria wants the one million dollars in her saving account to last 20 years into her retirement, how much could she withdraw from the saving account monthly for retirement? You can assume the saving account will pay the same 4.8% annual interest rate. Round your answver b. to the nearest cent. If Maria increases her monthly deposit in part (a) by $200, how much will be in her savıng account if she wants to retire at 60 years of age? Round your answer to the nearest cent. C.
Suppose your friend is celebrating her 35th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $80,000 from her savings account on each birthday for 15 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in the local credit union, which offers 9 percent interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund. If she starts making these deposits on her 36th birthday and continues to make deposits until she is 65 (the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals at retirement? b) Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum payment on her 35th birthday to cover her retirement needs.…
Tala McLouf, a 21-year-old BBA graduate, likes to plan for her future ahead, and would like to save $47.50 every week for her retirement later on. At the end of each year, Tala would invest her total accumulated savings into an account at the local credit union paying her a yearly interest rate of 8.25%. How much money will Tala be able to save per year? How much money will Tala have saved when she reaches 55 years old? How much would Tala have saved by the time she is 60 years old, if she starts investing for her retirement at the age of 40 after paying off the mortgage for her house in Los Angeles? Even if Tala starts saving at 40, she would still like to have the same amount of money in her account when she is 60 as she would have had, had she started saving back when she was 21.
a 20 year old college student wants to save $3 a day for her retirement. Every day she places $3 in a drawer. At the end of the year, she invests the accumulated savings ($1095) in a brokerage account with an expected annual return of 12%. 1) how much will she have when she is 65 years old? (Draw a timeline and use both the formula and financial calculator methods) 2) How much must a 40 year old investor needs to deposit annually to catch the 20 year old when the investor becomes 65 years old? (draw a time line and use both the the formula and financial calculator methods)

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