Retirement Savings. A couple thinking about retirement decide to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years they will receive a gift of $10,000 that also can be invested. (LO5-3) a. How much money will they have accumulated 30 years from now? b. If their goal is to retire with $800,000 of savings, how much extra do they need to save every year?

Retirement Savings. A couple thinking about retirement decide to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years they will receive a gift of $10,000 that also can be invested. (LO5-3) a. How much money will they have accumulated 30 years from now? b. If their goal is to retire with $800,000 of savings, how much extra do they need to save every year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

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27. A couple thinking about retirement decide to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years they will receive a gift of $10,000, which can also be invested. a. How much money will they have accumulated 30 years from now? (Round your answer to the nearest cent.) b. If their goal is to retire with $800,000 of savings, how much extra do they need to save every year? (Round your answer to the nearest cent.)
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Imagine that you are a 65 year old woman and her husband has just retired with a combined retirement nest egg of 1.5 million. If they withdraw $120,000 at the end of each year, how many years will it be before they exhaust their retirement savings. Their retirement saving earns 4% interest. 15 16 17 14 18
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