An employee wants to retire and receive P 5 000 a month. She wants to pass this monthly payment to future generations after her death. She can earn an interest of 8% compounded annually? How much will she need to set aside to achieve her perpetuity goal?

An employee wants to retire and receive P 5 000 a month. She wants to pass this monthly payment to future generations after her death. She can earn an interest of 8% compounded annually? How much will she need to set aside to achieve her perpetuity goal?

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

K. Tanja wants to establish an account that will supplement her retirement income beginning 30 years from now. Find the lump sum she must deposit today so that $400,000 will be available at time of retirement, if the interest rate is 10%, compounded quarterly. How much must Tanja invest? P= (Round to the nearest cent as needed.)
Emily is trying to decide between investing $1,000 or $1,500 at the beginning of each year for the next 40 years into a retirement account yielding 10.78%. After 40 years, how much extra money will Emily have in her IRA if she invests $1,500 annually instead of $1,000 annually? $4,016,726.94 B) $4,052,810.53 $273,849.26 $30,020.95
A woman who is now 28 years old invests $40,000 in a retirement account. What interest rate, compounded daily, would she have to earn in order for the account to be worth $600,000 when she retires at age 65? Round your final answer to two decimal places.
Your friend has just celebrated her 30th birthday and accepted her first job. She must now decide how much money to put into her retirement plan. Assume that every dollar in the plan is expected to earn a return of 8% p.a. and that your friend cannot make any withdrawals until she retires on her 65th birthday. After that point, she can make withdrawals as she wishes. She plans to live to 100 years and she plans to work until she turns 65. She estimates that to live comfortably in retirement, she will need $120,000 every year starting at the end of the first year of retirement and ending on her 100th birthday. Assume that she starts the contribution to her retirement plan on her 31st birthday and that she will contribute the same amount to the plan at the end of every year that she works. The amount of money she would need to contribute every year to fund her retirement is closest to: a. $7,475. b. $8,116. c. $8,207. d. $8,817.
Madam plans to fund his individual retirement account with the maximum contribution of P20,000 at the end of each year for the next 10 years. If Madam can earn 10% on his contributions, how much will he have at the end of the tenth year? (rounded) P122,900 P318,740 P200,000 P518,800 P423,050
A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.$ At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.$
Answer the following questions. Show your complete solution. 1. Aylene is preparing for an income fund for her retirement. She wants to receive 15,000 pesos quarterly for the next 25 years starting 1 month from now. The income fund pays 10.5% compounded monthly. How much Aylene deposit now to pay for the annuity? 2. Cheska is saving for her dream cellphone. She deposits 2,000 pesos at the end of each month that earns 5% per year compounded semi-annually. Find the amount in the account after 1 1⁄2 years. 3. Janine wants to but a lot which cost 1 million pesos. She plans to give a down payment of 20% of the cost, and the rest will be paid by financing at monthly interest rate of 2% for 10 years in equal monthly installments. What will be the monthly payment? 4. Christopher wants to have 50,000 pesos in 4 years by saving equal regular payments. He can make a deposit at the end of each month in account that earns 8.5% per year compounded quarterly. How much must he deposit to achieve his…
Susanna wants to purchase a house costing $212,286. She plans to put $51,874 toward a down payment and finance the rest at 2.9% payable monthly for 30 years. If she stays with this payment schedule for the entire 30 years, how much will she actually pay for the house including down payment and interest?
Six years ago, Gladys opened a retirement account with an initial deposit of $14,000. Each year since then, she has added $2,000 to the account at the end of each year. She plans on contributing for the next 25 years. How would you determine the future value of her account at retirement? O Future value of a lump sum and future value of an annuity. O Future value of an annuity and the present value of a lump sum. O Future value of a lump sum and present value of an annuity. O Future value of an annuity.
A couple plans to retire in 25 years. At that time, they would like to have enough money in an account so that they can receive a $3,600 every month end for 20 years. The account earns APR 5.8% and will continue to do so until there is a zero balance in the account. To achieve this goal, how much money does the couple need to have in this account by the time they retire? (calculate to cents.)
You have just made your first $10,000 contribution to your individual retirement account. Assume you earn an annual rate of return of 12 percent compounded quarterly and make no additional contributions. What will your account be worth when you retire in 50 years?Note: Do not round intermediate calculations and round your answer to 2 decimal Blaces, e.g., 32.16. You need $20,000 to go on your dream vacation to South Africa. If you save $5,000 today in an account at 10% interest compounded annually, how long will you have to wait to go on your dream vacation?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information: Years until retirement: 30 Amount to withdraw each year in retirement: $120,000 Years to withdraw in retirement: 12 Interest rate while saving: 9% Interest rate in retirement: 6% Saved today (nest egg): $25,000 The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not occur until one year after she retires, and she plans to spend her entire nest egg. Calculate the amount she must deposit each year to reach her retirement goal. (Round to 2 decimals)

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