tirement saving at the end of December of her first year of working, and her retirement saving will crease by 1% every year. Miss Piggy plans to work until December of the year where she turns 65. Gi at Miss Piggy is one of the best engineer, she will likely be employed throughout her career. If the inte a the retirement account is 12% annually, how much will she have in December of the year she turns 6
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- A civil engineer planning for her retirement places 8% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $170,000 and she expects her salary to increase by 4% each year, what will be the future worth of her retirement fund after 16 years provided it earns 9% per year? The future worth of her retirement fund will be $A man who is 30 years old at the start of the year, is considering getting an MFM degree. He currently earns $40,000 per year and expects to continue earning that amount for the rest of his working life (until age 65). He will give up his income for two years and will pay $20,000 per year in tuition, if he attends business school. In exchange, he expects a raise in his salary after completing his MFM. Assume that the post-graduation salary grows at a 5% annual rate and that the discount rate is 8%. What is the minimum expected starting salary after graduation for him that makes attending business school a positive-NPV investment? (Assuming that all cash flows happen at the end of each year.) Use Time Value of Money calculations.A civil engineer planning for her retirement places 11% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $160,000 and she expects her salary to increase by 2% each year, what will be the future worth of her retirement fund after 17 years provided it earns 11% per year?
- Caroline has just turned 22 and has begun her first job. Her first year’s salary is $60,000per year, which is paid monthly ($5,000 per month). For planning purposes:•Her future annual salary will grow at a rate of 4% per year.•She will work for 40 years and retire on her 62th birthday.•She will receive a pension payment each year for 30 years beginning on her 62thbirthday.•Accounting for inflation, her first pension payment should be $150,000.•Her pension payments should increase at a rate of 2.5% per year.•She has decided to withdraw 100p% from her monthly paycheck.•She wants to use a 6% EAR as an appropriate interest rate.What is the minimum value for p (to the nearest whole percent) to fund Caroline’s plan?Ignore taxes for this analysis.Melissa is starting a savings for the initial capital to start a jewelry company right after graduation for 3 years. Her job base salary after graduating is expected to be $85,000 paid through equal payments at the end of every month throughout the year. She assumes a 7% increase in annual salary each year. Melissa expects to pay $1,800 monthly rent for her apartment and an extra $1,500 per month to cover other living expenses and she plans to save the rest. As her salary grows, she is plans to move to a nicer place and lifestyle. The expected rent increase is 5% every year and the expected increase in other expenses is 10%. She plans to keep this constant pattern of expenses and income. Assume a 5% nominal interest rate per year compounded monthly.1. Draw the Cash Flow Diagram2. How much money will she have at the end of year 3?3. If Melissa knows that she needs only $100,000 to start her company, how many months it takes until he saves up this amount with the current saving…Sandy, a manufacturing engineer, just received a year-end bonus of 26,000 dollars that will be invested immediately. With the expectation of earning at the rate of 8% per year, Sandy hopes to take the entire amount out in exactly 20 years to pay for a family vacation when the oldest daughter is due to graduate from college. Find the amount of funds that will be available in 20 years.
- Lindsay is 29 years old and has a new job in web development. She wants to make sure that she is financially sound by the age of 55, so she plans to invest the same amount into a retirement account at the end of every year for the next 26 years. (a) Construct a data table in Excel that will show Lindsay the balance of her retirement account for various levels of annual investment and return. If Lindsay invests $10,000 at return of 6%, what would be the balance at the end of the 26th year? Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes. Round your answer to a whole dollar amount. $ 10,000Joanna is making a financial plan for her retirement. Today is her 35th birthday, and she receives $150,000 from her grandmother's will. She plans to retire 25 years from now when she turns 60. Once she is retired, she will need to withdraw $4,000 a month for 15 years, starting on the day she retires. She anticipates earning 6% compounded semi-annually for the entire 40 years. How much of her inheritance money must be invested today to meet her retirement goal?A civil engineer planning her retirement will deposit 10% of her salary each year into a high-technology stock fund. If her salary this year is $50,000 and she expects her salary to increase by 4% each year, how much will she have in the fund after 15 years assuming the fund earns 12% per year?
- A woman is planning for retirement in 30 years and decides she can deposit $6,000 each year on December 31 into a retirement savings plan that she expects will pay 6% interest. In 20 years she also expects to receive a small inheritance of $12,000 that she can also put into her retirement fund. The woman anticipates that her retirement fund will need to last 20 years; she estimates that she will need $60,000 at the end of each year in retirement to cover her living expenses. Her plan is flawed. How much extra does she need to save every year (rounded to dollars and cents) to achieve her goals? (Do not round interim calculations)Harika has just graduated from the University with a BBA and must decide whether to start working now or to get an MBA. In either case, she intends to retire 20 years from today. If she goes to work now, she can expect a salary of INR 5,00,000 per year for each of the next 20 years. An MBA requires an expenditure/fees of INR 6,00,000 per year for each of the next two years, and Harika will start working immediately after getting her MBA. If she gets an MBA, her salary will be a constant INR 10,00,000 per year. Her discount rate for valuing cash flows is 7% per year. Assume that cash inflows (salary amount) occur at the end of the year, while the cash outflows (MBA fees) occur at the beginning of the year. Based on the above, what should be her decision whether to do an MBA or start working now? You can ignore taxesMr. Agunton is planning for her retirement. He is 30 years old today and would like to have N500,000 when he turns 55, he estimates that he will be able to earn 8 percent rate of return on her retirements over time; he wants to set aside a constant amount of money every year (at the end of the year to help achieve his objective. How much money did Agunfon invest at the end of each of the next 25 years to realize his goal of N500,000 at the end