Night When Jamal graduated from college recently, his parents gave him $1,590 and told him to use it wisely. Jamal decided to use themoney to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 16 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the endof 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use (Exhibit 1-A,Exhibit 1-B, Exhibit 1-C, Exhibit 1-D).Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimalplaces.IRA balance

Let's break down the calculation step by step: 1. Initial Investment: Jamal's parents gave him…

Answered: When Jamal graduated from college…

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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When Jamal graduated from college recently, his parents gave him $1,980 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 14 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D). Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimal places. IRA balance
Daryl wishes to save money to provide for his retirement. He is now 30 years old and will be retiring at age 64. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 12% compounded monthly. Then one year after making his final deposit, he will withdraw $100,000 annually for 25 years. In addition, and after he passes away (assuming he lives 25 years after retirement) he wishes to leave in the fund a sum worth $1,000,000 to his nephew who is under his charge. The fund will continue to earn 12% compounded monthly. How much should the monthly deposits be for his retirement plan?
John is trying to decide whether to contribute to a Roth IRA or a traditional IRA. He plans on making a $5,000 contribution to whichever plan he decides to fund. He currently pays tax at a 32 percent marginal income tax rate, but he believes that his marginal tax rate in the future will be 28 percent. He intends to leave the money in the Roth IRA or traditional IRA for 30 years, and he expects to earn a 6 percent before-tax rate of return on the account. (Use Table 1.) Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Problem 13-78 Part b (Static) b. How much will John accumulate after taxes if he contributes to a traditional IRA (consider only the funds contributed to the traditional IRA)?
Daniel knows that he can withdraw up to a maximum of $35,000 from his Registered Retirement Savings Plan (RRSP) under the Home Buyers Plan (HBP). He knows that he has to pay at least 1/15th of the amount that he borrows. Danieľ's RRSP market value is $45,680 on the day that he decides to withdraw $25,700 under the HBP for the down payment on his new home. What is the minimum annual amount that Daniel must repay to his RRSP on the amount he withdraws from the HBP? A $3,045.33 В $2,333.33 $5,000.00 D $1,713.33 E $3,433.33
Anderson just landed his first job and is scheduled to start work on his 20th birthday. His parents have advised him that even though retirement seems like a long way off, it is important to start planning early. He has decided to deposit $4,500 into a retirement fund at the end of his first working year and hopes to increase this amount by 5% each year thereafter. The retirement fund is projected to pay an average rate of interest of 4%. If Danny plans to retire at age 65, and will therefore make 45 payments into the fund, how much is the retirement fund worth to him today?
As soon as she graduated from college, Kay began planning for her retirement. Her plans were to deposit $500 semiannually into an IRA (a retirement fund) beginning six months after graduation and continuing until the day she retired, which she expected to be 30 years later. Today is the day Kay retires. She just made the last $500 deposit into her retirement fund, and now she wants to know how much she has accumulated for her retirement. The fund earned 10 percent compounded semiannually since it was established. a. Compute the balance of the retirement fund assuming all the payments were made on time. b. Although Kay was able to make all of the $500 deposits she planned, 10 years ago she had to withdraw $10,000 from the fund to pay some medical bills incurred by her mother. Compute the balance in the retirement fund based on this information.
Linus would like to start saving for his retirement. Starting April 1, 1950, he will make annual deposits into an account, with the last deposit coming on April 1, 1990. Linus assumes he will get pay raises, and plans to increase his deposits by 3.1 percent each year. If he would like to be able to withdraw 44000 dollars per year forever, with the first withdrawal on April 1, 1993, how much will Linus's first deposit need to be? (Assume an interest rate of 4.1 percent effective throughout.)
Mr. and Mrs. Revilla decided to sell their house and to deposit the fund in a bank. After computing the interest, they found out that they may withdraw 350,000 yearly for 10 years starting at the end of 3 years when their child will be in college. How much is the fund deposited if the interest rate is 3% converted annually? Round off your answer in two decimal places.
Isabelle wants to save for retirement. She earns $5400 in income each month, and wishes to deposit 10% of her income into a savings acount each month. If the savings account has a nominal interest rate of 7%, compounded monthly, how much will be in the account if she retires in 35 years? John won a lottery. After taxes, he was able to take home his winnings worth $510000. He decides to deposit 20% of this in a separate savings account for retirement. If the savings account has a nominal interest rate of 7%, compounded monthly, how much will be in the account if he retires in 35 years?
John recently set up a TDA to save for his retirement. He arranged to have $150 taken out of each of his monthly checks; it will earn 8% interest. He just had his 45 birthday, and his ordinary annuity comes to term when he is 65. Find the future value of the account.
Fatima recently set up a tax-deferred annuity to save for her retirement. She arranged to have BD 110 taken out of each of his monthly checks; it will earn 2% annual interest. She just had her 23 birthday, and her ordinary annuity comes to term when she is 69. Find the following: a. Find the future value of Fatima’s annuity. b. Find Fatima’s total contribution to the annuity. c. Find the total interest earned on the annuity. Note: I need a 100% correct answer with the steps please
Justin is saving for his retirement 21 years from now by setting up a savings plan. He has set up a savings plan wherein he will deposit $104.00 at the end of every six months for the next 11 years. Interest is 7% compounded semi-annually. (a) How much money will be in his account on the date of his retirement? (b) How much will Justin contribute? (c) How much will be interest?

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