Suppose a man retires at age 65, and in addition to Social Security, he needs $2200 per month in income. Based on an expected lifetime of 204 more months, how much would he have to invest in a life income annuity earning 4% APR to pay that much per year? (Round your answer to two decimal places.)
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Suppose a man retires at age 65, and in addition to Social Security, he needs $2200 per month in income. Based on an expected lifetime of 204 more months, how much would he have to invest in a life income
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- You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once you retire, with the first retirement funds withdrawn one year from the day you retire. You estimate that you will earn 6% per year on your retirement funds and that you will need funds up to 25 years after retirement. Use the PV of an ordinary annuity due formula. a) Calculate the amount you must deposit in an account today so that you have enough funds for retirement b) Calculate the amount you must deposit each year, starting one year from today, so that you have enough funds for 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.
- A couple will retire in 50 years; they plan to spend about $32,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 9% on retirement savings. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $62,000 on their child's college education? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.A couple will retire in 50 years; they plan to spend about $24,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 7% on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual savings 687.99 b. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $54,000 on their child's college education? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual savings 1,699.14You plan to make your first $6,470 contribution to your individual retirement account in 2 years. Assuming you earn a 7.02 percent rate of return and make no additional contributions, what will your account be worth (in $) when you retire 50 years from now?
- You want to retire at age 65. You decide to make a deposit to yourself at the end of each year into an account paying 3%, compounded annually. Assuming you are now 25 and can spare $1,400 per year, how much will you have when you retire at age 65? (Round your answer to the nearest cent.)_____$A couple will retire in 50 years; they plan to spend about $34,000 a year (in current dollars) in retirement, which should last about 25 years. They believe that they can earn a real interest rate of 7% on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual savings $ Annual savings 761.74 b. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $64,000 on their child's college education? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 1,370.95What’s the rate of return you would earn if you paid $1,500 for a perpetuity that pays $105 per year?
- It is estimated that you will pay about $80,000 into the Social Security system (FICA) over your 40-year work span. For simplicity, assume this is an annuity of $2,000 per year, starting with your 26th birthday and continuing through your 65th birthday. Solve, a. What is the future equivalent worth of your Social Security savings when you retire at age 65 if the government’s interest rate is 6% per year? b. What annual withdrawal can you make if you expect to live 20 years in retirement? Let i= 6% per year.A couple will retire in 50 years; they plan to spend about $38,000 a year in retirement, which should last about 25 years. They believe that they can earn 9% interest on retirement savings. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $68,000 on their child’s college education? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Henry would like to have a retirement income of $3,000 per month (month-end payments). How much must he have in his retirement fund on the day that he retires if he plans to live for 25 years? Assume that the account will earn j12=3.6%.