10. At age 24, Brandie decides to put $150 a month into an account that has a 6% APR until she retires at the age of 67. a. How much money will she have put into the account when she retires? b. What will the account be worth when she retires?

10. At age 24, Brandie decides to put $150 a month into an account that has a 6% APR until she retires at the age of 67. a. How much money will she have put into the account when she retires? b. What will the account be worth when she retires?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 8E

See similar textbooks

Related questions

Q: Assuming you want to purchase a 5 year bond that has a face value of $10,000 that pays 12% interest.…

A: Solution:- Bond price means the price at which a bond is trading in the market. It is the summation…

Q: A market in which all financial assets can be sold to someone other than the original issuer is…

A: A primary market is a market where securities are first issued by its original issuer/ creator. Once…

Q: Growing Real Fast Company (GRF) is expected to have a 25 percent growth rate for the next four years…

A: The value of a share is nothing but PV of all the future dividends.

Q: First America Bank’s monthly payment charge on a 48-month, $20,000 loan is $568.26. The U.S. Bank’s…

A: Given

Q: 23. Boricua stock is currently trading at a market price (S) of $95. have an options strategy in…

A: Profit to a long position in put option Profit to a long position in put option is calculated as…

Q: Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley at the…

A: Honor Code: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: Operating profit margin = 8.65% Sales to assets ratio = 3.20 Assets = 630,000 Equity = 430,000…

A: Return on equity (ROE) : It is calculated as Net Income divided by Shareholders' equity. It is…

Q: Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are…

A: Par Value is $1,000 The coupon rate is 4% Time to maturity is 18 years The current yield to maturity…

Q: A contract can be fulfilled by making an immediate payment of $21,100 or equal payments at the end…

A: An annuity is a series of payments that are provided in return for a lump sum amount paid today. It…

Q: You are considering an investment that requires you to spend $150,000 today and receive $200,000 in…

A: Given Investment Amount = $150,000 Maturity Value= $200,000 Cost of Fund from Bank(With Collateral)=…

Q: Suppose that a 15-year bond with a face value of 3000 dollars is redeemable at par and pays…

A: A bond refers to an instrument that shows the amount that is borrowed from the lender by the…

Q: An oil and gas company is trying to determine whether or not it should replace a fixture on one of…

A: Concept. Future worth (FW) method. In this method, future value of all the cash flows associated…

Q: Polly's Parrot Shop's cost of common equity is 18% and its yield to maturity on debt is 10%. The…

A: Cost of common equity (Ke) = 18% Cost of debt (Kd) = 10% Tax rate (t) = 35% Common stock (E) =…

Q: You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of…

A: A portfolio is made up of the different types of assets in which the investment has been made. The…

Q: Ashley Olson is early in her career and is now employed as the managing editor of a well-known…

A: Investment The process that involves investing funds in a project with an aim to obtain maximum…

Q: banks

A: And we all are aware that both risk and return go together. So if your firm is making more financing…

Q: Explain fully when making the comparison between stocks and bonds and clearly show that you…

A: A company can raise funds and capital through different sources and forms. The two most common…

Q: Indell stock has a current market value of $130 million and a beta of 1.50. Indell currently has…

A: Given Current market value is $130 million Beta is 1.50

Q: Massy Ltd on the other hand is a matured company so their dividend has not changed in years. Their…

A: The value of security can be find out the from dividend discount model and can be calculated as the…

Q: ABC limited company looking to invest in one of the proposed projects. The cost of that project is…

A: Profitability Index "PI" of a project is ratio of the present value of the cash inflows and Initial…

Q: Stag Corp. will pay dividends of $4.75, $5.25, $5.75 and $7 for the next four years. ($4.75 in year…

A: Year Dividend 1 4.75 2 5.25 3 5.75 4 7.00 Required return = 15% Growth rate after 4th…

Q: 5. The relationship between a firm's capital structure and other company attributes As a firm takes…

A: The entity that utilizes merely equity for raising the capital indicates an unlevered firm. However,…

Q: Foundation, Incorporated, is comparing two different capital structures: an all- equity plan (Plan…

A: MM Proposition 1 without taxes states that adding debt to a firm's capital structure does not affect…

Q: sider the following annual returns of Estee Lauder and Lowe’s Companies: Estee Lauder Lowe’s…

A: Standard deviation is the statistical measure of the risk of the stock and it is measured as…

Q: You want to buy a $175,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan…

A: We have a mortgage transaction on a home. We have to find some amounts based on the mortgage.

Q: A BBB-rated corporate bond has a yield to maturity of 13.2%. A U.S. Treasury security has a yield…

A: We have the bond and treasury securities cash flows information. We have to find the prices of these…

Q: One cost that potentially could result from central banks targeting money growth is O. high…

A: Central bank is the apex bank of a country. A country’s central bank formulates and implements…

Q: The law of one price The theory of purchasing power parity (PPP) states that in the long-run…

A: Purchasing power parity refers to the theory that states the situation of exchange rates at the time…

Q: nd re-investment plan’, and how it benefits the com

A: Company is owned by the shareholders and it is necessary for the company to share profit with…

Q: Which of the following is not a determinant of option value? A) The exercise price B) The price of…

Q: What formula is being used if not using excel?

A: The concept of the time value of money determines that the worth of money gets depreciated over a…

Q: Calculate Volant’s Weighted Average Cost of Capital and round to 1 basis point.

A: Weighted average cost of capital (WACC) is an important metric in finance. It is computed by…

Q: Deposits of $92.00 are made at the end of every quarter for 3 years. What will the deposits amount…

A: Quarterly interest rate = Annual rate Frequency of compounding in a year = 0.054 = 0.0125 Number of…

Q: An investment project provides cash inflows of $ 2,403 per year for 10 years. What is the project…

A: Initial cost = $9,090 Annual cash inflow = $2,403 Payback period = ? Payback period is the period…

Q: States of Economy Probability T-Bills Phillips Pay-up Rubber-Made Market Index Recession 0.2…

A: The expected return is the required rate of return on the investment, that is anticipated over a…

Q: A debt of $7,000.00 is to be paid off with 10 equal semi-annual payments. If the interest rate is…

A: Given: Particulars Amount Debt (PV) $7,000 Semi annual payments(NPER) 10 Interest rate 13%

Q: A design studio received a loan of $6,750 at 5.80% compounded semi-annually to purchase a camera. If…

A: Here, Particulars Values Loan Amount (PV) $6,750.00 No. of years 3.00 Interest rate 5.80%…

Q: A firm is looking to evaluate the income coming from a project. The project has a lowest possible…

A: Expected income The expected income is calculated as shown below. Expected income=First…

Q: Which of the following statements is correct? a. As Modigliani and Miller made clear in their…

A: The capital structure indicated an appropriate mixture of equity and debts in the company where the…

Q: You want to buy a $195,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: The Down-payment is the sum of money first paid for something. No interest will be charged on…

Q: True or False: The following statement accurately describes how firms make decisions related to…

A: A paragraph is given describing how firm decides to issue new equity. An issuance of equity is…

Q: b. Suppose Cumma Technology stock currently trades for $10.74 per share. What arbitrage opportunity…

A: concept. according to MM proposition I, Value of levered firm = Value of unlevered firm levered firm…

Q: The Summit Petroleum Corporation will purchase an asset that qualifies for three-year MACRS…

A: Net Present Value (NPV) of a project is determined to understand the cost and benefit of the…

Q: Using the data in the table to the right, calculate the return for investing in the stock from…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: Assume that your uncle gave you $50,000 to invest solely in mutual funds. Based on your point in…

A: Mutual funds is the most sought after investment vehicle now a days. The lucrative returns provided…

Q: can you show formula used?

A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…

Q: A stock had returns of 10% 3% and -6% over the past 3 years. What is the mean of the stock return…

A: Mean of the returns is the average calculated using the below formula. Standard deviation formula…

Q: You have taken out a 30-year mortgage of $100,000 at 6% annual interest. Your plan is to sell the…

A: A mortgage is a loan that is taken out to purchase a property. The property being purchased acts as…

Q: c) How much income did Theresa lose?

A: c) Data given: Earnings of Theresa per month=$ 3700 No. of months missed at work = 2 months…

Q: Business cycles vary in the time between recessions but not in the length of recessions. vary in the…

A: Several statements have been made about the length and timing of business cycles. We have to find…

Concept explainers

Retirement Income

Retirement income is the income received by the retiring person after retirement. Income can either be paid every month or paid annually. The retiree would get a guaranteed income until their death. Retirement income payment differs from person to person based on their investment type and payment method. Some are paid on a lump-sum basis and some are paid in a regular series with fixed payment or variable cash flow. Retirement income can be created from retirement savings, investment, salary, bonus, and wages from employment. Every working individual should plan their retirement income according to their income goals for the future. The plan should be made by identifying suitable income sources, estimating future expenses, applying a savings plan, and managing risk and assets. The most common age for retirement is between 60-65 years.

Question

10. At age 24, Brandie decides to put $150 a month into an
account that has a 6% APR until she retires at the age of 67.
a. How much money will she have put into the account
when she retires?
b. What will the account be worth when she retires?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Sara wants to have $530,000 in her savings account when she retires. How much must she put in the account now, if the account pays a fixed interest rate of 9%, to ensure that she has $530,000 in 18 years time? OA. $112,357 OB. $202,243 OC. $119,492 O D. $157,300
At age 27, Laura deposited $1000 into an IRA, it earns 7 7/8% compounded monthly. A. What will it be worth when she retires at 65? B. How much would it be worth if she didn't set it up until she was 35?
Jeni has decided that she needs to start saving for her retirement. She can afford $100 a month deducted automatically from her paycheck. She deposits it into an account that earns 4.5% interest compounded monthly. How much will she have in her account when she retires 42 years later? A. $ 14,922.70 B.$ 50,400.00 C. $132,213.00 D. $149,226.96
After retiring, Sofía wants to be able to withdraw $8,500.00 every quarter from her account for 33 years. Her account earns 7% interest compounded quarterly.How much does Sofía need in her account when she retires? Sofía needs $________ in her account when she retires. How much total money will Sofía pull out of her account? In total$_______ Sofía will pull out from her account. How much of that money is interest? The amount of money that is interest is $________ .
After retiring, Amina wants to be able to withdraw $30,500.00 every year from her account for 25 years. Her account earns 9% interest compounded annually.How much does Amina need in her account when she retires? Amina needs$________ in her account when she retires. How much total money will Amina pull out of her account? In total, Amina will pull out $________ from her account. How much of that money is interest? The amount of money that is interest is$________ .
1) Sabrina waits to start saving for retirement until age 35. If she saves the same $8000 each year beginning at age 35, and receives a “net” 7.00% annualized return, how much money would she accumulate by age 65?
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 40-year-old woman decides to put funds into a retirement plan. She can save $3,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.$ At retirement how much can she withdraw each year for 25 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Appendix C
3. A 45-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and earn 6 percent on this savings. a. How much will she have accumulated if she retires at age 65?
B. John is currently 25 years old. He has $10,000 saved up and wishes to deposit this into a savings account which pays him J12 = 6% p.a. He also wishes to deposit $X every month into that account so that when he retires at 55, he can withdraw $2000 every month end to support his retirement. He expects to live up till 70 years. How much should he deposit every month into his account? Draw a timeline for this question and solve? Timeline is compulsory.
A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.$ At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.$
Marilyn wishes to retire at age 65 with $2,000,000 in the bank. At the age 21, she decides to begin depositing money into an account with an APR of 11%. What is the monthly payment Marilyn must make in order to make this happen?