Manshukh You are 40 years old and want to retire at age 65. Each year, starting one year from now, you will deposit anequal amount into an investment account that pays 4.6% interest. The last deposit will be on your 65th birthday.On your 65th birthday you will switch the accumulated savings into a safer bank account that pays only 3.1%interest. You will withdraw your annual income of $110,000 at the end of that year (on your 66th birthday) andeach subsequent year until your 90th birthday. On that birthday you want to give $350,000 to your children.How much do you have to save each year to make this retirement plan happen?How much do you have to save per year during your working years in order to achieve your retirement goal?(Round to the nearest cent.)$

In retirement planning the present value of retirement needs must be equal to the future value of…

Answered: You are 40 years old and want to retire…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You are trying to calculate how much money you should have at retirement. On your 60th birthday you will retire and immediately make your first withdrawal of $4,482.06. You plan to make 24 such withdrawals each year. You plan to continue withdrawing at that level and frequency until you are 90 years old. (Assume beginning of period withdrawals with the first withdrawal on your retirement date and no withdrawal on your final birthday.) During retirement your savings will earn only 3.5% per annum. How much do you have to have saved at retirement to fund these planned withdrawals?
You are 40 years old and want to retire at age 60. Each year, starting one year from now, you will deposit an equal amount into a savings account that pays 7% interest. The last deposit will be on your 60th birthday. On your 60th birthday you will switch the accumulated savings into a safer bank account that pays only 4% interest. You will withdraw your annual income of $140, 000 at the end of that year (on your birthday) and each subsequent year until your 85th birthday. On that birthday you want to give $1,000,000 to your children. How much do you have to save each year to make this retirement plan happen?
You want to be able to withdraw $50,000 from your account each year for 20 years after you retire. You expect to retire in 25 years. If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
You are saving for retirement. To live comfortably, you decide that you will need $2.5 million by the time you are 65. Today is your 30th birthday, and you decide, starting today, and on every birthday up to and including your 65th birthday, that you will deposit the same amount into your savings account. Assuming the interest rate is 5%, the amount that you must set aside each year on your birthday is closest to: O $71,430. O $26,260. O $26,100. O $27,680.
You have decided to start a savings plan for your retirement. You plan to make an annual deposit of $50,000 each year for the next 6 years. The first deposit to be made one year from today. The bank pays a nominal interest rate of 5% annually. How much your savings account with the bank be if you leave the money in the bank to be withdrawn all in 19 years from today? Round to the nearest $0.01. DO NOT use the $sign. Do not use commas to separate thousands. For example if you obtain $1,433.728 then enter 1433.73; if you obtain $432 then enter 432.00 Your Answer: Answer
You plan on retiring in 25 years. In order to increase your retirement income, you open a retirement. account today and make a $20,000 deposit. In addition, you will deposit $5,000 every year for the next 25 years. Your plan is to start making annual withdrawals of $50,000 from the account, after you retire. Assuming the account is earning 7% rate of interest, how many years will it take, after you retire, before. the funds in your account are completely exhausted. Please include a written answer in a text box. (Assume annual compounding)
You want to be able to withdraw $50,000 from your account each year for 20 years after you retire.You expect to retire in 15 years.If your account earns 4% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
Starting at age 35, you deposit $2000 a year into an IRA account for retirement. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 6%, compounded continuously, how much will be in the account 30 years later, when you retire at age 65? How much of the final amount is interest? What is the value of the IRA when you turn 65? (Round to the nearest dollar as needed.) How much of the future value is interest? (Round to the nearest dollar as needed.)
You plan to make a series of deposits in an individual retirement account. You will deposit $1,000 today, $2,000 in two years, and $2,000 in five years. If you withdraw $1,500 in three years and $1,000 in seven years, assuming no withdrawal penalties and all deposits and withdrawals are done at the start of specific year, how much will you have after eight years if the interest rate is 7 percent?

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