Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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%.arrow_forwardYou 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.arrow_forwardHow 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 $________ .arrow_forward
- 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%arrow_forwardA 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%arrow_forwardYou 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 $1,400 per year, how much will you have when you retire at age 65? (Round your answer to the nearest cent.)_____$arrow_forward
- 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 $ ??arrow_forwardPLEASE, 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 monthlarrow_forwardA 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 22.00 years and pool the money into a savings account that pays 4.00% APR. They plan on living for 27.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal? Yearly Contribution Account Fidelity Mutual Fund Vanguard Mutual Fund Employer 401k Balance $24,316.00 $184,560.00 $304,945.00 $1,000.00 $10,000.00 $15,000.00 APR 6.00% 8.00% 6.00%arrow_forward
- A student wants to save for her retirement. At the end of every year, she deposits 475 in a brokerage account with an expected annual return of 4.3%. How much money will she have in the account in 30 years? Enter your answer as a number with 2 places of precision (i.e. 1.23). Do not include dollar signs or commas.arrow_forwardYou are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?arrow_forwardYou have just made your first $4,500 contribution to your individual retirement account. Assume you earn an annual return of 11.3 percent and make no additional contributions. What will your account be worth when you retire in 39 years?arrow_forward
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