4. You are in your 4th year now and realize that you need to create a budget for yourself. You make $1,500 a month at your part-time job, and have $1,350 in monthly expenses. Your parents encourage you to start an RRSP (registered retirement savings plan) by putting the rest of the money you have at the end of every month into an account that pays an average of 4.3% per year compounded monthly. How much will you have when you retire in 45 years if you continue?

4. You are in your 4th year now and realize that you need to create a budget for yourself. You make $1,500 a month at your part-time job, and have $1,350 in monthly expenses. Your parents encourage you to start an RRSP (registered retirement savings plan) by putting the rest of the money you have at the end of every month into an account that pays an average of 4.3% per year compounded monthly. How much will you have when you retire in 45 years if you continue?

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

Flora is planning ahead for a 3-month world tour to celebrate completing graduate school. The trip’s estimated cost is $7,000. Flora would like to accumulate that sum over the next 4 years. She plans to make monthly deposits into her school’s minibank which gives 5% interest compounded monthly. How much does she has to contribute monthly?
Your goal is to retire in 20 years. You plan to start on this path by saving $200 a month. If you earn 6% annually (using monthly compounding), how much will you have saved in 20 years? Right before you started saving, you were notified by your auto insurance company that you will receive a discount of $20 a month on your auto premium because of your impeccable driving record. If you chose to put those savings towards your retirement goal each month, how much would your retirement account be worth if you save $220 a month for 20 years with an annual return of 6% (compounded monthly)? Please discuss your thoughts on the impact of saving an additional $20 a month over 20 years.
You plan on making deposits of $1,000 into a savings account at the end of every year in college. If you graduate in 5 years and the account earns an annual rate of 8%, how much will you have at graduation? PLEASE BREAK IT DOWN
You decide to create a savings account for your children's college education, putting $140 permonth into an account paying 6.1% compounded monthly. What will be the value of theaccount in eighteen years? (Please help by using calculator)
You want to buy a car without going into debt. You are budgeting $58,796 for the purchase price and you want to make the purchase in 5 years. You think you can earn 9.79% per year on any savings you generate between now and the car purchase. How much will you have to deposit at the end of each month in order for you to be able to pay cash for that car in 5 years?
Your parents are giving you $270 a month for 4 years while you are in college. At an annual interest rate of 7.32 percent, what are these payments worth to you when you first start college? $10,645.37 $11,004.00 $11,205.65 $15,004.18 $10,832.13
After you graduate, you want to start saving for a down payment on a house which you plan to buy 5 years from now. The company that hired you gave you a $1,703 sign on bonus now that you will put towards the house. You plan to save $222 per paycheck also to put towards the house in years 1-5. You get paid biweekly which means there are 26 paychecks per year. If the account where the money will be deposited achieves 9%, how much will you have as a down payment in year 5? Enter your answer to the nearest dollar.
Suppose you're fresh out of college and have a new job where you're able, by being frugal, to put aside $400 from each monthly paycheck for 2 years to invest in a fund that pays you 6% interest, compounded monthly. By the end of two years you would have put $9600 total into that fund, and it would be worth $10,223.65 at that point. Not bad. You've made over $600! But by then there are other constraints on your monthly paycheck and you can't continue your good habit. However, you leave that $10,223.65 invested in the fund that pays 6% compounded monthly. How much is that investment worth when you go back to claim it when you retire, exactly 46 years later? Round your answer to the nearest dollar,
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
You have decided to start saving for retirement. Your bank is willing to set you up with an IRA with a 9.2% APR. You need to have $925, 000 in the account in 45 years to be able to retire. 2a. How much of your remaining monthly budget do you want to put into the account each month? 2b. Why did you decide on this number? Support your answer with at least 3 sentences.
your parents are giving you $220 a month for 4 years while you are in college. At an interest rate of .51 percent per month, what are these payments worth to you when you first start college?
You've decided to leave a scholarship to Calu's business program in the amount of $3,000 annually. If you can earn 6% on your money annually and inflation is 2%, how much do you need to set aside to ensure the program never runs out of money?

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