How much money should a young married couple invest now at a 7% annual rate if they want to have $100,000 in the bank when they reach retirement age in 30 years? (See the present value formula below. Round your answer to the nearest dollar.) P = A(1 + i)~n
Q: Suppose an investment will pay $25,000 in 39 years from now. If you can earn 11.05% interest…
A: Calculate the present value as follows: Present value = Future value / (1+rate)^years.
Q: Suppose you are 30 years old and would like to retire at 60. Moreover, you would like to to have a…
A: Using the PMT function in excel
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A: Time value of money (TVM) is used to measure the value of money at different point of time in the…
Q: You are planning to invest $1,000 in an account earning 12% per year for retirement. a. If you put…
A: Amount to be invested = $1000 Interest rate = 12%
Q: (Refer to this word problem In order to plan for their retirement, a married couple decides to…
A: Quarterly payment (Q) = P 50000 r = 8% per annum = 2% quarterly = 0.02 n = 10 years = 40 quarters
Q: A) How much should you deposit at the end of each month into an investment account that pays 8.5%…
A: Therefore, the monthly payment is $385.27.
Q: Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of…
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…
Q: You will deposit $30,000 per year into an account beginning today that pays 13 percent per year.…
A: The future value is the amount that will be received at the end of a certain period. In simple…
Q: Your client is 25 years old. She wants to begin saving for retirement, with the first payment to…
A: A. Computation of the value she will have at 65 are shown below: The formula snip for computing the…
Q: (a) She wants her first payout to have the same purchasing power as does $17,000 today. How big…
A: Note: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…
Q: How much will you need to put in the bank today at 4% interest to have P20,000 in five years?
A: Present value is the sum of the current value of money of future cash flows. It is also known as a…
Q: 4. A couple decides to invest some money in an account for use during retirement. Their goal is to…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Write the present value function, letting x represent the number of years.
A: Time value of money: The time value of money is the idea that the value of money received today will…
Q: Assume you can earn 9.5% per year on your investments. a. If you invest $200,000 for retirement at…
A: Annual interest rate = 9.5%
Q: Suppose that Charles and Nancy are saving to buy a house. They have $20,000 in the bank, but know…
A: The concept of the time value of money states that the same amount of money has more value today…
Q: 1.Your parents will retire in 21 years. They currently have $210,000 saved, and they think they will…
A: "Since this question contains multiple parts, we will answer only the first part for you. Kindly…
Q: Suppose you want to have $800,000 for retirement in 25 years. Your account earns 7% interest. a)…
A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where, r = rate of interest per period i.e.…
Q: How many years would it take save an adequate amount for retirement if he deposits $2,100 per month…
A: A study that proves that the 1value of money today is higher than the future value of money is term…
Q: Suppose that you set a goal of accumulating $2 million by the time you retire, and that you know you…
A: Accumulated amount needed = $2 milllion r = 6% Let A = Annual saving
Q: A client wants to retire in 20 years and expects to enjoy retirement for at least 25 years. They…
A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…
Q: You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Suppose you want to have $600,000 for retirement in 20 years. Your account earns 4% interest. a)…
A: Introduction Future Value: The value derived for the money invested today at a future point of time,…
Q: what annual rate of return would your investment account need to generate if you make no future…
A: The annual rate of return: It is the sum of money earned over a period of 12 months period on…
Q: 1. If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in…
A: Present value is the current value of a future amount that is to be received or paid out.Future…
Q: How much do you need to invest today if you will also invest $2,700 at the end of every year for 39…
A: Accumulated amount (AV) = $1,000,000 Rate of return (r) = 0.065 Annual deposit (D) = $2,700 Period…
Q: Suppose you want to have $400,000 for retirement in 35 years. Your account earns 4% interest. Round…
A: The present value is the current value of the amount that has to be paid or received in the future.
Q: uppose you buy a home and finance $285,000 at $2,233.17 per month for 30 years. What is the amount…
A: Interest paid = total payment - financed amount
Q: Suppose you buy a home and finance $285,000 at $2,223.17 per month for 30 years. What is the amount…
A: Loan amount = $ 285,000 Monthly payment = $ 2223.17 Period = 30 Years Number of monthly payments =…
Q: Assume you can earn 8.6% per year on your investments. a. If you invest $110,000 for retirement at…
A: Retirement savings is an important part for all the employees and for saving funds for retirement,…
Q: How much do you need to save each year for 30 years in order to have $775,000, assuming you are…
A: Given information: Future value amount is $775,000 Interest rate is 8% Number of years is 30
Q: If Rex wants to be a millionaire by the time he retires (45 years from now), how much does he need…
A:
Q: A woman desires to have $400,000 in a savings account when she retires in 20 years. Because of the…
A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…
Q: Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $60,000 per…
A: Given information: Withdrawal amount is $60,000 each year Number of withdrawals is 31 Interest rate…
Q: Assume that you plan to buy a condo 5 years from now, and you estimatethat you can save $2,500 per…
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Q: Present value) Sarah Wiggum would like to make a single investment and have $2.0 million at the…
A: As per the given information: Single investment - $2,000,000 Period - 35 years Earning on mutual…
Q: You will deposit $30,000 per year into an account beginning today that pays 13 percent per year.…
A: Annual Deposit = 30,000 beginning of period deposits Interest Rate = 13% Future Value Required =…
Q: Sarah Wiggum would like to make a single investment and have $1.2 million at the time of her…
A: Future Value = $1.2 million Time Period = 30 years Rate of Return = 4%
Q: If you want $3,000,000 saved by the time you retire in 40 years and you earn 8% interest on your…
A: Amount required $3,000,000 Time is 40 years Interest rate is 8%
Q: You want to start saving for retirement. If you deposit Php2000 each year at the end of the next 60…
A: Future value = Annuity * FVAF ( rate, years )
Q: Your parents will retire in 28 years. They currently have $300,000 saved, and they think they will…
A: Investment amount (PV) = $300,000 Future value required (FV) = $2,500,000 Period (n) = 28 Years
Q: Assume you can earn 8.6% per year on your investments. a. If you invest $110,000 for retirement at…
A: The major decisions that an individual considers while setting up the retirement goals are the total…
Q: Many people get ready for retirement by depositing money into a monthly or annual savings plan.…
A:
Q: Discuss the meaning of "the present value of a future amount"? Give the equation for present value?…
A: Money grow by the time and interest rate and future value of money is more than what today due to…
Q: Your parents will retire in 30 years. They currently have $350,000 saved, and they think they will…
A: Given information: Present value amount (PV) is $350,000 Future value (FV) is $1,950,000 Number of…
Q: A man wants to buy a $33,000 car. He will put 20 % down and finance the rest over 5 years. How…
A: Given information: Purchase price = $33,000 Loan = $33,000 -20%×$33,000 = $26,400 Term = 5 years…
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- How many years would it take save an adequate amount for retirement if he deposits $2,100 per month (at the end of each month) into an account that pays 11 percent per year if he wishes to have a total of $1,000,000 at retirement? m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FV Must identify variables and use excelYou will deposit $30,000 per year into an account beginning today that pays 13 percent per year. How long (in years) would it take for you want have a total of $1,000,000 at retirement? m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FV Must identify variables and use excelSuppose you have $10,000 to invest for the next 30 years. You are given 3 choices on where to invest your money. Account #1 Account #2 Account #3 a. Calculate the APR (assume P-$100, -1 year) for each account. Round to 2 decimal places, in percent form. Account #1 15.21% compounded monthly 15.18% compounded daily 15.16% compounded continuously SHOW YOUR WORK BELOW.
- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.Many assets provide a series of cash inflows over time; and many obligations require a series of payments. When the payments are equal and are made at fixed intervals, the series is an annuity. There are three types of annuities: (1) Ordinary (deferred) annuity, (2) Annuity due, and (3) Growing annuity. One can find a annuity's future and present values, the interest rate built into annuity contracts, and the length of time it takes to reach a financial goal using an annuity. Growing annuities are often used in the area of financial planning. Their analysis is more complex and often easier solved using a financial spreadsheet, so we will limit our discussion here to the first two types of annuities. The future value of an ordinary annuity, FVAN, is the total amount one would have at the end of the annuity period if each payment (PMT) were invested at a given interest rate and held to the end of the annuity period. The equation is: Each payment of an annuity due is compounded for one…5. You decide to invest $100 into a savings account with an interest rate of 2% annually in2015. The amount of money in your savings account in a given year can be modeled by the following function. P(t)=100(10)^.009 a. Evaluate P(0) and explain what it means in this context. b. Approximately how many years will it take for the amount of money in your bank account to reach $120? c. What year will you have $120 in your savings account?
- d. If, instead, you decide to withdraw $170000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take until you exhaust your savings? (Use trial-and-error, a financial calculator: solve for "N", or Excel: function NPER) e. Assuming the most you can afford to save is $1500 per year, but you want to retire with 1000000 in your investment account, how high of a return do you need to earn on your investments? (Use trial-and-error, a financial calculator: solve for the interest rate, or Excel: function RATE) *round to two decimal places for d) and e)*4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present value? (show the process and can use financial calculator)Q1. You have been told that you need $x today in order to have $100,000 when you retire 20 years from now. The annual interest rate is 5% on average. Computex. Answer Q2. You plan to make a $40,000 contribution to your individual retirement account, at 3.5 percent per year on average. Compute how much it will be worth if you deposit it for 25 years. Answer Q3. Repeat Q1-Q2, when the interest rate is being componded every SIX MONTHS (or SEMIANNUALLY). Answer Q4. Erica is purchasing a financial instrument that will pay $5,000 a year for seven years, at the end of every year. How much should she pay for this investment today if she wishes to earn a 12 percent rate of return? Answer Q5. Repeat Q5, when you are committed to making contributions at the beginning of every year. Answer Q6. Solve for x: Jane recently purchased a new home with a mortgage of $x. She financed it at 6.6 percent interest with annual installments of $36,000 for thirty years. Answer Q7. Solve for x: Jane recently…
- Suppose an investment will pay $7,000 in 44 years from now. If you can earn 6.15% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. Group of answer choices8) Special Retirement PlanYou set up a retirement plan where you will invest $20,000 per year in an account with a guaranteed rate of return of ? = 0.05. The plan requires that you start investing immediately at year t=0, and make fifteen (15) additional payments of $20,000 in years t=1, t=2, ..., t=10. You make 11 investments in total. a. What will be the value of this stream of investments in year t=50? b. What is the maximum you can withdraw per year over the twenty (20) year period from t=51, t=52, ..., t=70? You have to withdraw the same amount each year. c. What is the maximum that you can withdraw per year forever if you start to make withdrawals in year t=51. You have to withdraw the same amount each year. 19)Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of that future sum. Assuming a positive interest rate (required rate of return), which of the following is a possible number for the present value of the $2500? Even without knowing the interest rate, it is possible to answer this question. O A. $2742.53 B. $2632.45 O C. $1967.25 OD. $2572.50 O E. None of the above is a possible number.