4. A couple decides to invest some money in an account for use during retirement. Their goal is to have $100,000 in 40 years. The account pays 5.5% compounded monthly. A. How much do they need to invest to meet their goal? B. How much interest will they earn? C. What is the annual percentage yield? D. Prepare a table that shows the growth of the investment.

4. A couple decides to invest some money in an account for use during retirement. Their goal is to have $100,000 in 40 years. The account pays 5.5% compounded monthly. A. How much do they need to invest to meet their goal? B. How much interest will they earn? C. What is the annual percentage yield? D. Prepare a table that shows the growth of the investment.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Suppose you have estimated that you will need $2,500 per month in your retirement to meet your expenses and live comfortably, and that you have found or chosen a fund (account) which pays monthly interest 4% APR . What principal, or balance, will your account need to maintain in order to be able to pay you this amount each month? Round/take your answer to the nearest cent.
Please help me answer the following time value of money question. Michael makes a $500 investment. At the end of 5 years, he has 700. Assuming that the interest is compounded monthly, what is the interest rate earned on his investment?
A couple will retire in 40 years; they plan to spend about $27,000 a year in retirement, which should last about 20 years. They believe that they can earn 7% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. b. How would the answer to part (a) change if the couple also realize that in 15 years they will need to spend $57,000 on their child’s college education?
1. Retirement Planning. A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 8 percent interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year.b. How would the answer to part (a) change if the couple also realizes that in 20 years, they will need to spend $60,000 on their child’s college education?
3. Laura invested $325 per month into a retirement plan with an APR of 2.2% for 35 years. a. How many payments will she make altogether? b. How much will she invest altogether? c. What will the final balance of her retirement plan be? d. How much of the final account balance is interest? e. What percent of the final account balance is interest? Round to one decimal place.
A family is saving for their child's education. They want to have $80,000 eighteen years from now . a.) How much do they need to deposit each month into an account earning 7.2% interest compounded monthly? b.) What is the interest earned on the account?
c) Retirement Investment: Savings at Retirement = Saving Periods = Interest Rate = Savings Deposit / month= monthly deposits / month
You are considering a retirement savings. For this you will need to determine following information. Average starting salary of you major. $73,000 Your annual retirement savings amount. 8% of annual income Your age when you start working. 23 years old Your age when you plan to retire. 58 Retirement account investment vehicle. This will determine the growth rate. ? idk what this is... When I retire I want to open a ice cream shop (this might help answer the question) Create an excel table with your age column, annual contribution, annual account balance. Re-do the calculation with monthly contribution and find your account balance at your retirement. Submit excel table with all your information.
You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year with the first investment made one year from now. You think you can earn 6.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,500 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 16 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 16th withdrawal (assume your savings will continue to earn 6.0% in retirement)? d. If, instead, you decide to withdraw $191,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
You have just made your first $5,000 contribution to your retirement account. Assume youearn a return of 10 percent per year and make no additional contributions.a. What will your account be worth when you retire in 45 years?b. What if you wait 10 years before contributing?c. After calculating parts a and b, what is the lesson learned?
After retirement, you expect to live for 25 years. You would like to have a $95,000 income each year. The annual interest rate is 9 percent per year. Required: Calculate the amount of savings you have in your retirement account to receive this income. A) Assume that the payments start on the day of your retirement. B) Assume that the payments start one year after the retirement.
A couple wants to set up a college savings account for their grandchild. If the account earns 4.4% interest compounded quarterly, how much should they invest today so that the account will be worth $50,000 in 18 years? Round your final answer to two decimal places.

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