Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 8% per year on his investments, how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar. a) $50,000 Ob) $21,352 Oc) $21,852 d) $4,576

Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 8% per year on his investments, how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar. a) $50,000 Ob) $21,352 Oc) $21,852 d) $4,576

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 10E

See similar textbooks

Related questions

Q: In 2012 the maximum Social Security deposit by an individual was $8,386.75. Suppose you are 27 and…

A: Payment = p = $8386.75Interest Rate = r = 2%Time = t = 65 - 27 = 38

Q: Need Help? Submit Answer Amount of Deposit m $1,250 Read It Frequency n quarterly Rate r 7% Time t…

A: Given ,m = $1250 r = 7% = 0.07t = 25 n = 4 (quarterly)

Q: Tater and Pepper Corporation reported free cash flows for 2023 of $56.1 million and investment in…

A: Free Cash Flows = $56.1 millionInvestment in operating capital = $39.1 millionDepreciation expense =…

Q: QUESTION:How do investors make decision to invest into a portfolio which is the combination of 2…

A: The correlation coefficient shows relationship between the 2 variables.

Q: Identify how each of the following separate transactions 1 through 10 affects financial statements.…

A: The objective of this question is to understand how different transactions affect the financial…

Q: A small hydro dam supplying electricity to 10,000 households has just been constructed that has cost…

A: A cost is incurred in business for maintenance of its assets like maintenance cost of machinery,…

Q: A loan officer is preparing the documents for a commercial term loan. The borrower's risk profile…

A: APR is the annual percentage rate. EAR is the annual effective rate. APR is the nominal rate or the…

Q: 1 - year, 2-year, 3 - year, and 4 - year annualized rates of return are 1.7%, 2.4%, 3.4%, and 4.1%,…

A: 1-year rate = 1.7%2-year rate = 2.4%3-year rate = 3.4%4-year rate = 4.1%To find: 2-year annualized…

Q: a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years.…

A: The annual rate is the growth rate linked to an investment, loan, or savings. It captures the…

Q: Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain…

A: Here,Dividend in Year 1 and Year 2 is $0Dividend in Year 3 is $2.00Growth Rate of Dividend in Year 4…

Q: Calculate the future value of each of the following investments. Round the answers to the nearest…

A: Present value=42750Interest rate=1.5%Compounding =monthlyCompounding period=n=48

Q: Consider the three stocks in the following table. Pt represents price at time t, and Qt represents…

A: Rate of return is a financial measure of an investment's gain or loss as a percentage of the…

Q: Kerrie Glass, Inc. had a 'days in inventory' of 5. Cost of goods sold was $6,643. If the company had…

A: Days in Inventory =(Inventory / Cost of goods sold) x 365=>5 = (Inventory / $6,643) x…

Q: Rossdale Company stock currently sells for $68.91 per share and has a beta of.88. The market risk…

A: The cost of equity is the expected return for investors holding shares of the company and represents…

Q: Last Price Maturity Coupon Rate Analyst Rating Industry Pay Dates Bond #1 $1255.12 10/2029 3.75% AAA…

A: Bond credit rating:A bond credit rating, sometimes known as a bond rating, is an important…

Q: Millicent is planning to travel to the United States of America in 3 year - time. She estimated that…

A: Present value of money refers to the concept that a dollar in the present is worth more than a…

Q: Problem 6.25 Suppose that A(1) $110, A(2) = $121, and A(10) $259.37. (a) Find the effective rate of…

A: Alternatively,

Q: 1. In a bank account that pays interest 2% p.a, what should you deposit now to have a balance of…

A: Future value is the amount that existing assets are worth at a specific future date after they have…

Q: A 30-year bond has an annual coupon rate of 6% for the first ten years, 7% for the next ten years,…

A: The price of a bond is determined by its present value, considering future cash flows in the form of…

Q: Compute to the penny the present value of $5,000 dollars to be paid at the end of four years if (a)…

A: Future value is a financial concept that refers to the projected value of an investment or asset at…

Q: A four-year investment requires annual deposits of $300 at the beginning of each year. The deposits…

A: Time = t = 4Payment = p = $300Interest Rate = r = 9%Payment Type = at the beginning

Q: State of Economy Recession Normal Boom Probability of State of Economy 0.10 (Click to select) 0.70…

A: State of economyProbability of state of the economyRate of return (Stock A)Rate of return (Stock…

Q: Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the…

A: First Cost (C) = $ -570000Replacement Cost,(R) Year 2 (n1) = $…

Q: North Pole Fishing Equipment Corporation and South Pole Fishing Equipment Corporation would have…

A: Rate of return:The rate of return is a metric for determining the profitability of an investment or…

Q: Suppose the annual returns for North Airline are 12%, 20%, 5%, 5%, 2%, 7% and for South Airline are…

A: Covariance of return statistically measures the variation between two sets of returns and the extent…

Q: Determine m, n, and i for money earning 7.9% compounded quarterly for 5 years and 3 months.

A: Compounding period = 4Tenure = 5 yrs and 3 monthsInterest rate = 7.9%

Q: Lever Age pays an 10% rate of interest on $10.20 million of outstanding debt with face value $10.2…

A: Rate of interest = 10%Debt = $ 10.20 millionEBIT = $1.2 millionInterest = 10%* $ 10.20 million =…

Q: Jordan and Carmen created a firm that is a separate legal entity and will share ownership of that…

A: A business has to be run in the form of a business organization. There are different types of…

Q: McCoy Industries' bonds currently sell for $1,302.40 and have a $1,000 par value. They have a…

A: Current Price of Bond = pv = $1302.40face Value = fv = $1000Coupon rate = c = 6.25%Time = t = 10

Q: Suppose a basket of goods in Paris costs €133 and the same basket purchased in New York costs $153.…

A: Inflation:The overall rate of increase in the cost of goods and services that results in a decline…

Q: Rbonds F-P P if the market price of a $1,000-face-value discount bond changes from $925 to $950, the…

A: Yield to maturity refers to the percentage of return an investor expects from an investment in a…

Q: Active Mama manufactures baby furniture, clothing, strollers, and accessories. In the current year…

A: Initial cost = $22,400CCA = 20%Sale price after 4 years = $9,500NPV = $37,016Residual value =$0Time…

Q: A 30-year fully amortizing mortgage loan was made 10 years ago for $75,000 at 6 percent interest.…

A: A debt is a source of capital that is borrowed by institutions at a predetermined rate of interest,…

Q: Using the formula given below: F - P Rbonds P if the market price of a $1,000-face-value discount…

A: Yield to maturity refers to the percentage of return an investor expects from an investment in a…

Q: Based on the following information, what is the balance of the loan after 5 years? Sale price:…

A: Sale price= $500,000Loan to value ratio= 0.70Interest Rate= 5%Mortgage term= 25 yearsTotal No. of…

Q: andra has just signed a 7-year lease for her new business. The full annual lease amount is due at…

A: Annual lease=$25918Period=n=7years.Interest rate=8%Growth rate=4%

Q: The most recent financial statements for Martin, Inc., are shown here: Income Statement: Sales $24,…

A: External funding required is the fund required to meet the projected or growing sales for the next…

Q: 6. Process and the procedures applied for Sukuk issue are almost same as those used for…

A: The unique financial areas known as capital markets are used for the trading of long-term assets…

Q: You are expecting to receive the following payments: $7,000 in one year and $5,000 three years from…

A: Payment for Year 1 = p1 = $7000Payment for year 3 = p3 = $5000Discount Rate = r = 8%

Q: A particular stock has a dividend yield of 1.3 percent. Last year, the stock price fell from $72 to…

A: Ending Price = $56Initial Price = $72Capital gains yield = (Ending Price - Initial Price) / Initial…

Q: Ten years ago, Hailey invested $1,100 and locked in a 8 percent annual interest rate for 30 years…

A: First we need to use future value formula to calculate value after 30 yearsFVn = PV*(1 + r)n FVn =…

Q: Fuente, Incorporated, has identified an Investment project with the following cash flows. Year Cash…

A: Future Value -The temporal value of money operates on the straightforward tenet that a dollar spent…

Q: Consider borrowing $250,000 to purchase a house at a 4% annual interest rate to be paid in full in…

A: The debt amortization schedule refers to the table that showcases the interest and principal…

Q: Absalom Energy's 8% coupon rate, semiannual payment, $1,000 par value bonds that mature in 20 years…

A: Coupon rate = 8%Par value = $1000Maturity = 20 yearsCall year =6 yearsCall price = $1025Current…

Q: You have found the following historical information for the Daniela Company over the past four…

A: PE ratio = Stock Price / EPSYear 1: 51.60 / 2.68 = 19.2537313432Year 2: 60.92 / 2.80 =…

Q: Suppose Sally Rubber Co. is going public and, based on the bookbuilding process, decides it will be…

A: In a Dutch Auction the auctioneer begins with a high asking price and lowers it until some bidders…

Q: What is the future value of a perpetuity with annual payments of $1,000 compounding at 10%

A: Payment = p = $1000Interest Rate = r = 10%

Q: MRS. JIMENEZ REQUESTED A LOAN FOR $8,500 FOR THE PURCHASE OF A TELEVISION AND AGREED TO PAY A TOTAL…

A: A loan is a sum of money that is borrowed from a lender with the agreement to repay in installments…

Q: 69. Claim against assets are represented by A. saved earning B. retained earnings C. maintained…

A: Retained earnings are the cumulative amount of net income that a company has retained or reinvested…

Q: a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years.…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Question

Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 8% per year on
his investments, how much does he need to deposit each year to reach his goal?
Round your answer to the nearest dollar.
a) $50,000
Ob) $21,352
Oc) $21,852
d) $4,576

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Calculate deposit of each year

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 6 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Joe Pierce has been offered the opportunity of investing $178,556.90 now. The investment will earn 8% per year and at the end of its life will return $500,000 to Joe. How many years must Joe wait to receive the $500,000?
Willie would like to have $500,000 set aside at retirement. He would like to make annual deposits into his retirement fund, and expects to retire in 30 years. In order to meet his goal, how much must he deposit each year if he can earn a 6% return? N =_____ I/YR =_____ PV =________ PMT =_________ FV = ____________
Your brother plans to retire in 15 years. He currently has a deposit of $300,000, and think he will need $1,500,000 at retirement. If he can save and deposit $7,000 at the end of each year in the following 15 years, annual rate of interest must he eam to reach his goal? O a. 11.12% O b.8.52% Ос 7.44% O d. 9.00% O e. 10.13% what
Starling wants to retire with $2, 110,000 in his retirement account exactly 41 years from today. He will make annual deposits at the end of each year to fund his retirement account. If he can earn 9.73 percent per year, how much must he deposit each year? ** PLS EXPLAIN HOW TO SOLVE USING A FINANCIAL CALCULATOR
You want to have $2,000,000 in net worth when you retire. To achieve this goal, you plan to invest $1,000 each year (starting one year from now) into an account of time that earns 10% interest rate compounded annually. The amount of time you can retire as a multimillionaire is how many years? 31.94 (32 years) 55.64 (56 years) 25.56 (26 years) 20.36 (20 years) detailed answer without the usage of excel
1. If you want to have $500,000 when you retire and you put $85,000 in your retirement account right now, and you can get an interest rate of 5.2% a year, how many years will it take you to achieve your goal? 2. Sammy decides to set up a retirement fund. He deposits $7,000 a year. He earns an annual interest rate of 4.5. How much will Sammy have in his retirement fund in 25 years? 3. Sammy wants to see what his retirement fund would be if he made $7,000 deposits at the first of every year instead of at the end. How much will Sammy have im his retirement fund in 25 years at the rate of 4.5% if the deposits are made at the beginning of the year? 4. Sammy wants to help a fellow small business owner. The other owner, Mr. Noles offers to pay Sammy $4,250 a year for 8 years in exchange for a loan of $28,000. If the interest rate is 4.2%, is this a good investment for Sammy? What is the present value of this annuity?
Ahmad is looking forward to retiring in 2036. He wants to invest some money so that he can earn 10,000 per year for the next 20 years of his life. If the rate of interest is 8% compounded annually, what is the amount of the current investment $98,181 $90,181 $88,181 $80,181 detailed answer please
Linda would like to have a retirement account with $3,000,000 in it on the day she retires 40 years from now. She is going to target a rate of return of 11.0% on her investments. How much does she need to invest each month, in order to reach her goal of $3,000,000 in 40 years? O $348.83 O $62,427.83 O $961.28 O $527.88
Assume your goal in life is to retire with $2,500,000. How much would you need to save at the end of each year if interest rates average 8% and you have a 15−year work life? (Round the final answer to the nearest whole dollar.) A. $92,074 B. $13,333 C. $788,104 D. $333,333
13. You have just made your first $4,000 contribution to your retirement account. Assuming you earn an 11 percent rate of return and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?). 14. You are saving up for a down payment on a house. You will deposit $600 a month for the next 24 months in a money market fund. How much will you have for your down payment in 24 months if the fund earns 12% APR compounded monthly?
(Present value) Sarah Wiggum would like to make a single investment and have $2.4 million at the time of her retirement in 32 years. She has found a mutual fund that will earn 5 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 17 percent, how soon could she then retire? a. If Sarah can earn 5 percent annually for the next 32 years, the amount of money she will have to invest today is $nothing. (Round to the nearest cent.)
Assume your goal in life is to retire with $3,200,000.How much would you need to save at the end of each year if interest rates average 4%and you have a 30−year work life? (Round the final answer to the nearest whole dollar.) A. $213,333 B. $4,267 C. $986,620 D. $57,056