nswer part a, a(i), a(ii), of this textbook question a) You are 35 years old today and are considering your retirement needs. You expect to retire at age 65 (in 30 years) and you plan to live to age 99. You want to buy a house costing $300,000 on your 65th birthday and your living expenses will be $30,000 a year after that (starting at the end of year 65 and continuing through the end of year 99, i.e. for 35 years). Assume an annual interest rate of 8%, annual compounding: (i) How much will you need to have saved by your retirement date to be able to afford this course of action? (ii) Suppose you already have $50,000 in savings today. If you can invest money at 8% a year, how much would you need to save at the end of each yea

Engineering Econ:   You’re looking at your parents’ retirement plans and studying the differences between their saving habits. On her thirty-first birthday, your mother Virginia invested $1,500 into her employer’s retirement plan, and she makes annual $1,500 payments for 10 years, so that her total contribution (principal) is $15,000. Your mother then stops making payments into her plan and keeps her money in the savings plan, untouched for 25 more years until retirement at age 65. Your father Anthony starts putting money aside on his forty-sixth birthday, when he deposits $2,000, and he continues these annual payments for 20 years until he reaches 65 years old. Thus, Anthony’s contributed principal amounts to $40,000 over this period of time. If Virginia’s and Anthony’s retirement plans both earn interest at a rate of 6% per year, compounded annually, then what is the difference in the future value of their savings when your parents turn 65? (e.g., FW(Virginia)-FW(Anthony))  Round…

A) When Liam Corbett was born, his grandparents opened a 529 college savings plan for him so that he had enough money to pay for college once he turned 18. His college education is expected to cost $225,000 on the day he turns 18 years old. Determine if there will be enough in the account given the following assumptions (Show your calculations): Assumption #1: The grandparents contribute $6,200 per year starting the day Liam is born and the account earns an average annual rate of return of 7%. Assumption # 2: The grandparents contribute $5,000 per year starting the day Liam is born and the account earns an average annual rate of return of 7%. Assumption # 3: The grandparents contribute $5,000 per year starting the day Liam is born and the account earns an average annual rate of return of 9%. Assumption #4: The grandparents contribute $8,500 per year starting the day Liam is born and the account earns an average annual rate of return of 4%. Assumption # 5: The grandparents contribute…

I am 40 years old. If you are going to retire at 65, post-retirement living expenses are $20,000 annual, an average annual market return of 6%, life expectancy of 90. How much do you need to save for your retirement?  (Please use the TVM calculation to solve for this question, and your answers would be different because your age varies.)

Excel Online Structured Activity: Required annuity payments Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $65,000 saved, and he expects to earn 8% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round your intermediate calculations. Round your answer to the nearest cent.…

Excel Online Structured Activity: Required annuity payments Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 3%. He currently has $220,000 saved, and he expects to earn 7% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.     Open spreadsheet, here is the spreadsheet.   How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round your intermediate calculations.…

Your son Tommy was just born today (Year O), and you are planning for his college education. You would like to make equal deposits every 26 weeks (assume a 52-week year) into a college savings account starting in Year 1 and ending in Year 21 (a total of 41 deposits), so that Tommy can make annual withdrawals in Year 18, 19, 20, and 21 for tuition. Tuition is currently (Year 0) $2,900/year, and it is expected to grow at 4% / year for each of the next 10 years, and then at 5%/year for all years after. You can earn a nominal annual rate of 8.45%, with interest compounded weekly (52-week year) in a college savings account. How much must each of the 41 deposits be to exactly fund the expected tuition expense? O $277.87 O $264.49 O $258.02 O $248.10 O $287.80

You are planning for your retirement. You expect to earn a monthly salary of $7,000 starting on the 1st month after you retire, which will be able to provide comfortably for your daily expenses through your retirement years. You are currently 33 and plan on retiring when you become 64, and you expect to live 20 years after retirement. In addition to providing a salary for your retirement you would like to buy a house by the time you reach 55. The house you dream of would cost you $1,650,000. Now you have a down payment of $50,000 (ignore closing costs). In addition you would like to offer yourself a retirement gift, a Mercedes that you would buy brand new to serve you through your retirement years. The car is expected to cost you $76,000. It will be purchased when you reach 64 years of age. Assume you can earn 12% compounded monthly from now until you retire, and the rate will change to 6% monthly compounding after that. And how much do you need to save in TOTAL per month after you buy…

Assume your child will enter college in 10 years. The total cost of a college education is estimated to be $60,000 at that time. You have $10,000 to invest today. What is the rate of interest that you must earn on your investment to cover the cost of your child's education? A. 17.21% B. 13.55% OC. 19.62% D. 25.52%

a)  How much should you save per month to be able to buy the car when you retire?  b)  How much should you save per month to be able to buy the house at the age of 55?  c)  Therefore, how much do you need to save in TOTAL per month if you can earn 12% compounded monthly from now till you buy your house taking into account your retirement expenses?  d)  And how much do you need to save in TOTAL per month after you buy your house until you retire taking into account your retirement expenses?