A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 8 percent. Use Appendix A and Appendix C to answer the questions. Round your answers to the nearest dollar. a. How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 40? b. How much additional money will be in the account if the saver defers retirement until age 70 and continues the contributions? c. How much additional money will be in the account if the saver discontinues the contributions at age 65 but does not retire until age 70?

A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 8 percent. Use Appendix A and Appendix C to answer the questions. Round your answers to the nearest dollar. a. How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 40? b. How much additional money will be in the account if the saver defers retirement until age 70 and continues the contributions? c. How much additional money will be in the account if the saver discontinues the contributions at age 65 but does not retire until age 70?

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 retired couple plans to supplement their retirement income with monthly withdrawals of the interest earned on a retirement account which has a balance of $200,000. a. If the fund earns interest monthly at an APR of 6%, which the couple always withdraws from the account, how much is generated in interest each month? Round/take your answer to the nearest cent. Recall that APR stands for Annual Percentage Rate. 24 b. Estimate (to the nearest tenth of a percent) the annual interest rate needed for this couple to be able to earn $1,350 per month in interest from this $200,000 account. Round your answer to the nearest tenth of a percent, eg., 2.5%.
You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does the same starting at age 35 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 60? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 60?-Select-You haveYour sister hasItem 3 the larger amount.
How much must you deposit each year into your retirement account starting now and continuing through year 10 if you want to be able to withdraw $90,000 per year forever, beginning 29 years from now? Assume the account earns interest at 14% per year. The amount to be deposited is determined to be $________ .
Hardev
show working using both a financial calculator and spreadsheet. after, show answer rounded off to the nearest dollar. Sam is in discussion with you about saving for his retirement. You are to advise him on how much he should deposit annually to meet his retirement needs. Assume that he will deposit a fixed annual amount for the next 20 years into a retirement savings account, starting one year from now. Sam has a son who will be attending college and plans to make 5 withdrawals (starting one year after making his final deposit into the retirement account) of $35,000 each to pay for his annual tuition for the following 5 years. Commercial Banks will be paying 6 percent on such retirement accounts for the next 25 years. Kindly advise Sam on how much he should place in the account annually to cover his retirement needs.
You will pay into a pension fund until you are aged 65. You are expected to live until your 80th birthday. You are currently 21 years of age. Pension fund contributions are made bi-weekly (use n=2/52) beginning in 2 weeks' time. If you are promised an interest rate of 7% compounded monthly: 1) What should be the size of your contribution if you plan to have $1 million at age 65? 2) Following your final contribution at age 65, you will retire. You will begin to withdraw money at the end of each month at a declining rate. Each subsequent withdrawal will fall by a constant rate of 0.5% per month for the duration of your life. You withdraw the final payment an instant before you die. If the effective annual rate of interest that you can receive on your pension fund is 5%, what is the most that you can withdraw on your first payment? 3) If your contribution is $100.00 bi-weekly, what is the future value of your pension fund immediately after the last payment if the prevailing interest…
A couple is saving for retirement with three different accounts. The table below shows the current balances in their accounts, along with their yearly contribution, and the yearly return on each account. The couple will retire in 24.00 years and pool the money into a savings account that pays 4.00% APR. They plan on living for 30.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal? Yearly Contribution $1,000.00 Account Fidelity Mutual Fund Vanguard Mutual Fund Employer 401k Balance $21,452.00 $183,845.00 $307,061.00 Submit Answer format: Currency: Round to: 2 decimal places. $10,000.00 $15,000.00 APR 7.00% 7.00% 6.00%
A couple is saving for retirement with three different accounts. The table below shows the current balances in their accounts, along with their yearly contribution, and the yearly return on each account. The couple will retire in 23.00 years and pool the money into a savings account that pays 3.00% APR. They plan on living for 28.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal? Yearly Contribution $1,000.00 $10,000.00 Account Fidelity Mutual Fund Vanguard Mutual Fund Employer 401k Balance $23,186.00 $180,962.00 $315,917.00 Submit Answer format: Currency: Round to: 2 decimal places. $15,000.00 APR 6.00% 8.00% 6.00%
You want to retire at age 65. You decide to make a deposit to yourself at the end of each year into an account paying 3%, compounded annually. Assuming you are now 25 and can spare $1,400 per year, how much will you have when you retire at age 65? (Round your answer to the nearest cent.)_____$
At age 24, someone sets up an IRA (individual retirement account) with an APR of 4%. At the end of each month he deposits $100 in the account. How much will the IRA contain when he retires at age 65? Compare that amount to the total deposits made over the time period. After retirement the IRA will contain $ ??
Jane makes regular (end of term) deposits into her RRSP (Registered Retirement Savings Plan) that will be converted into an RRIF (Registered Retirement Income Fund) 27 years from now. During retirement Jane would like to receive $5,200 at the end of every three months for 22 years. If interest is 4.52% compounded quarterly (for both the RRSP and RRIF). Answer the following questions, and round all answers to two decimal places where necessary.1) How much money should Jane have in her RRIF to receive payments of $5,200 at the end of every three months?P/Y = Incorrect C/Y = N = Incorrect I/Y = Correct%PV = $Incorrect PMT = $Incorrect FV = $2) What payment will Jane have to make at the end of every three months into her RRSP so that there is enough money in her RRIF at the start of her retirement?P/Y = C/Y = N = I/Y = %PV = $ PMT = $ FV = $ Submit QuestionQuestion 3
PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS2.Alejandra Marrufo wants to know how much she should deposit today, so that in 10 years she will have the amount (VF) of 77,150.00, which she needs to make a pension payment for her domestic worker, a) if the account pays 8.125% interest compoundable semiannually; b) if the account pays 9.65% compoundable monthl

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