Ralph wants to quit his job and move to Hawaii on December 25, 2015. Once there, he anticipates that he will need to make annual withdrawals of 12500 dollars (starting on December 25, 2016) to supplement his income from working as a cabana boy, and he wants the money to last 10 years (i.e. he'll make 10 withdrawals total). His plan is to make annual deposits, starting on December 25, 2000 and ending on December 25, 2015, into an account paying 8% effective interest. How large should each deposit be for Ralph to realize his goal? Answer=| dollars.

Ralph wants to quit his job and move to Hawaii on December 25, 2015. Once there, he anticipates that he will need to make annual withdrawals of 12500 dollars (starting on December 25, 2016) to supplement his income from working as a cabana boy, and he wants the money to last 10 years (i.e. he'll make 10 withdrawals total). His plan is to make annual deposits, starting on December 25, 2000 and ending on December 25, 2015, into an account paying 8% effective interest. How large should each deposit be for Ralph to realize his goal? Answer=| dollars.

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

Jazelle Momba wants to visit her family in Zimbabwe in 2025, which is 7 years from now. She knows that it will cost approximately $8,100 including flight costs, on-the-ground costs, and extra spending money to stay for 4 months. If she opens an account that compounds interest at 6% semiannually, how much does she need to deposit today to cover the total cost of her visit?
Jazelle Momba wants to visit her family in Zimbabwe in 2022, which is 7 years from now. She knows that it will cost approximately $7,200 including flight costs, on-the-ground costs, and extra spending money to stay for 4 months. If she opens an account that compounds interest at 6% semiannually, how much does she need to deposit today to cover the total cost of her visit? (Round your answer to the nearest dollar.) Deposit
When John Michael retired, he had a retirement account with a $910,000 balance. He decided that he would use this account to provide 30 years of equal monthly payments. It is now 19 years later and John Michael just received his 228th montly check. Looking ahead, he can see that he needs to stretch his payments over another 16 years rather than the eleven more he had originally planned. If he does this, how large will his new montly payments be? Assume he earns interest at the APR of 9% compounded monthly throughout his retirement.
Jazelle Momba wants to visit her family in Zimbabwe in 2025, which is 6 years from now. She knows that it will cost approximately $8,900 including flight costs, on-the-ground costs, and extra spending money to stay for 4 months. If she opens an account that compounds interest at 6% semiannually, how much does she need to deposit today to cover the total cost of her visit? (Use Table 12.3.) (Round your answer to the nearest dollar.) Deposit
Madison is planning to save for his newborn daughter’s college tuition, to be paid in 18 years. The amount he wishes to have by that time is $70,000. He plans to deposit $2,300 in a bank account every year for 18 years, starting next year. Suppose the account pays 2% interest on deposits, compounded annually. How much would he need to deposit right now, to make up the remaining amount necessary by the end of 18 years? a. $13,378.03 b. $14,529.48 c. $15,841.33 d. $17,003.96 e. $18,458.72.
A metallurgical engineer decides to set aside money for his newborn daughter's college education. He estimates that her needs will be $20,000 on her 17th, 18th, 19th, and 20th birthdays. If he plans to make uniform deposits starting 3 years from now and continue through year 16, what should be the size of each deposit, if the account earns interest at a rate of 8% per year?
Adele is planning for retirement. She would like to have $75,000 in her hand at the beginning of her first year of retirement at age 65 to live on for the year. She estimates that the amount will have to grow by 6% every year to keep up with inflation. What APR (nominal rate per year) should her retirement account earn if it is compounded continuously? She plans to deposit $21,000 on her 40th birthday and plans to keep increasing the deposits by 6% every year and till her 64th birthday. She estimates her life expectancy to be 85, meaning she would like to have the last retirement payment on her 85th birthday.
Max wants to save $500,000 to give to the local clown college. Max decides he can afford to deposit $10000 each month into an account which pays 4% monthly. How many full deposits will Max need to make? a) What will be the size of the concluding deposit one month after the last full deposit
Danny is saving towards his vacation. He has determined that the total cost including airfare and accommodation will amount to $5,000. a. If he sets aside $400 per month from his salary, starting from the end of this month, in an account that pays interest of 9% per annum, will he have enough to make the trip at the end of the year? b. How much more will he have in the account if he made his first deposit of $400 today? What kind of annuity is this?
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 $130,000 from her savings account on each birthday for 24 years following her retirement, the first withdrawal will be on her 66th birthday. Your friend intends to invest her money at 10.7% interest per year. How much money must she accumulate by the time she retires in order to make these withdrawals? (Round your answer to the nearest dollar)
Ali has decided to take a trip back home to California in 1 ½ years, but she needs to save up some money first. She deposits $55 every week into an account that has an APR of 0.14%. How much money will she be able to save up for her trip?
Kourtney currently works at Bruin Productions and decide to finally plan for the future, she wants to retire in 10 years, but has not saved for retirement. She wants to have $250,000 when she retires in 10 years. How much should she deposit each month into an account that pays 6.1% annual interest, compunded monthly?

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