Peter and Blair recently reviewed their future retirement income and expense projections. They hope to retirein 29 years and anticipate they will need funding for an additional 20 years. They determined that they wouldhave a retirement income of $62,000.00 in today's dollars but that they would actually need $86,142.00 inretirement income (in today's dollars) to meet all of their objectives.a. What is their annual shortfall at retirement assuming inflation of 3 percent per year? Click on the table iconto view the FVIF table:b. At the time that they retire, how much additional amount must they have accumulated to fund theirretirement needs, assuming 3 percent inflation and a rate of return of 9 percent? Click on the table icon to viewthe PVIFA table:c. Calculate the additional amount that Peter and Blair must save each year for the next 29 years if they wishto completely fund their income shortfall. Click on the table icon to view the FVIFA table:

The future value is the predicted value of an investment or amount of money at a given future…

Answered: a. What is their annual shortfall at…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 43P

See similar textbooks

Similar questions

Monica has decided that she wants to build enough retirement wealth that, if invested at 9 percent per year, will provide her with $4,800 of monthly income for 20 years. To date, she has saved nothing, but she still has 25 years until she retires. How much money does she need to contribute per month to reach her goal? First compute how much money she will need at retirement, then compute the monthly contribution to reach that goal. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Contribution per month mane
Mr. and Mrs. Hennesy met with their adviser and concluded that they would need $40,000 per year after they retire in order to live comfortably. They plan to retire 10 years from now and expect to enjoy 20-year of happy retirement before they go to the great beyond. How much should they deposit now in a bank account paying 9 percent to reach financial happiness during retirement?
Using the Time Value of Money for Retirement Planning. Carla Lopez deposits $3,400 a year into her retirement account. If these funds have an average earning of 9 percent over the 40 years until her retirement, what will be the value of her retirement account?
Your parents will retire in 18 years. They currently have $250,000 saved, and they think they will need $1,000,000 at retirement. What annual intrest rate must they earn to reach their goal, assuming they don't save any additional funds?
Finding the required interest rate: Your parents will retire in 19 years. They currently have $350,000 saved; they think they will need $800,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don’t save any additional funds?
Your parents will retire in 29 years. They currently have $250,000 saved, and they think they will need $2,250,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?
Monica has decided that she wants to build enough retirement wealth, if invested at 8 percent per year, to provide her with $3,500 of monthly income for 20 years. To date, she has saved nothing, but she still has 30 years until she retires. How much money does she need to contribute per month to reach her goal? First compute how much money she will need at retirement, then compute the monthly contribution to reach that goal.
An individual has determined utilizing the annuity method of capital needs analysis that he needs $1,045,656 at the beginning of his retirement to meet his retirement life expectancy goals. If this individual would like to be more conservative in his retirement planning forecast and maintain this capital balance throughout his retirement life expectancy of 32 years, given an expected earnings rate of 6%, and an inflation rate of 3% during the period, how much more would he need to have at the beginning of his retirement?
You plan to retire in 20 years. At the point of retirement, you want to be able to withdraw 25478 at the end of each year forever. Assume that you earn a 7.11% rate of return prior to retirement and an 4.54% rate of return after retirement. If you do not want to make any further contributions to your retirement fund, how much do you need today? Round answer to the nearest dollar.
Hi, on the topic of time value of money, I am having trouble with the steps to answer the following questions: 1. Mia plans to save $9,700 a year for the next 27 years to help her in retirement starting at the end of this year. If her super fund earns 8.6% p.a, how much money would she be able to spend per year over the following 35 years?" 2. Jane intends to retire in 30 years' time. What annual contribution should she make to her superannuation fund, starting at the end of the current year, if she expects to draw a pension of $120,000 per year for 20 years following her retirement? Her fund earns a return of 5% p.a. with annual compounding. Thank you! :)
Your parents will retire in 29 years. They currently have $250,000 saved, and they think they will need $2,250,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Ross has decided that he wants to build enough retirement wealth that, if invested at 5 percent per year, will provide him with $3,500 of monthly income for 25 years. To date, he has saved nothing, but he still has 15 years until he retires. How much money does he need to contribute per month to reach his goal? First compute how much money he will need at retirement, then compute the monthly contribution to reach that goal. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS