A 50-year-old engineer planning for retirement places 14% of his salary each year into a high-yield bond fund. If his salary this year (end of year 1) is $103,000 and he expects his salary to increase by 3% each year, determine the future worth of the retirement fund after 15 years, provided it earns 7% per year. The future worth is $ 9946.0265

A 50-year-old engineer planning for retirement places 14% of his salary each year into a high-yield bond fund. If his salary this year (end of year 1) is $103,000 and he expects his salary to increase by 3% each year, determine the future worth of the retirement fund after 15 years, provided it earns 7% per year. The future worth is $ 9946.0265

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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A 35-year old man is considering a lavish personal pension plan paying 50,000monthly annuities for 5 years that should start when he reaches 55. He makes quarterlydeposits now on the account bearing a constant interest rate of 2.5% per annum for 5-years and plans to place the total balance accrued on time deposit. All interests are at 2.5%per annum except for the time deposit that bears 8.0% annual interest. 1. What is the present value of his pension plan?2. What is the present value of the 5-year quarterly deposits?3. How much is the 5-year quarterly deposits?4. Construct a cash flow diagram for the repayment scheme5. Construct the amortization table for the deposits.
John has invested in an annuity policy fund which requires him to place an annual deposit of $10,000 for the next 20 years. During this period, an interest rate of 10% p.a. will be earned for the first 5 years, followed by an interest rate of 8% p.a. for the next 5 years and 6% p.a. for the remaining years. Compute the accumulated amount at the end of 20 years. Please answer fast i give you upvote.
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By the end of this year you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement you wish to have an annual sum of $50,000 to supplement your social security benefits. Therefore, you opened now your retirement account with 7% annual interest rate. At retirement you liquidate your account and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement years. How much will the face value of the bond that you will be investing?Please calculate the monthly payment in your retirement account in order to be able to achieve the plan mentioned above? How much will your inheritors receive? Kindly solve all the questions and sub questions.
By the end of this year you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement you wish to have an annual sum of $50,000 to supplement your social security benefits. Therefore, you opened now your retirement account with 7% annual interest rate. At retirement you liquidate your account and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement years. Suppose you think if you were to retire right now you would have needed $50,000 each year to supplement your social security and maintain your desired lifestyle. But because there is on average 3% annual inflation, when you retire in 30 years from now you need more than $50,000 per year to maintain the lifestyle you like. How much annual payment in the retirement account is needed to accumulate the amount needed to purchase the bond…
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