You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $240,000 per year for the next 40 years (based on family history, you think you'll live to age 80). You plan to save for retirement by making 20 equal annual installments (from age 20 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will leave the money in this fund until it is completely depleted when you are 30 years old. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) (Click the icon to view the present value table.) To make your plan work answer the following questions: (Click the icon to view the questions.) 1. How much money must you accumulate by retirement? (Hint Find the present value of the $240,000 withdrawals.) Calculate the present value to find out how much money must be accumulated by retirement. (Round your answer to the nearest whole dollar) The present value is 2. How does this amount compare to the total amount you will draw out of the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing However, by age 40 you only need to have invested These numbers are different because More info 1. How much money must you accumulate by retirement? (Hint Find the present value of the $240,000 withdrawals.) 2. How does this amount compare to the total amount you will draw out of the investment during retirement? How can these numbers be so different? 3. How much must you pay into the investment each year for the first twenty years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity) 4. How does the total out-of-pocket savings compare to the investment's value at the end of the 20-year savings period and the withdrawals you will make during retirement? Print than the amount of money you will eventually withdraw from the investment. Done OA. You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every year-the balance remains invested where it continues to earn 10% interest. OB. You need to have far less accumulated than what you will withdraw because you only withdraw a portion of the investment every year-the balance remains invested where it continues to earn 10% interest. OC. You need to have the same accumulated as you will withdraw because you will not earn further interest on your investment when you reach retirement OD. None of the above. 3. How much must you pay into the investment each year for the first twenty years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity) (Round your answer to the nearest whole dollar) For the first twenty years, the amount you must pay into the investment each year is 4. How does the total out-of-pocket savings compare to the investment's value at the end of the 20-year savings period and the withdrawals you will make during retirement? (Use the investment rounded to the nearest whole number that you calculated above, then round your final answer to the nearest whole dollar) The total out-of-pocket savings amounts to This is far than the investment's worth at the end of twenty years and remarkably

An investment will generate $12,000 a year for 30 years. If you can earn 12 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$   Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 9 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$   Should you buy it in this case?

Mateo and Klaus would like to buy a house and their dream starter home costs $650,000.  Their goal is then to save $65,000 for a down payment and then would take out a mortgage loan for the rest.  They plan to put their monthly saved amount in a conservative mutual fund that has a track record of a 4.25% rate of return, compounded quarterly.  To be sure they don't go spending this money on other things, they are going to move it into their investment account at the beginning of each month.  Their hope is to be able to buy this home in 7 years.  What would their monthly savings amount have to be to reach this goal? What will be the total interest earned? Mateo and Klaus have now saved up their down payment to buy a home, but they still need to borrow to cover the rest.  For the home they want this will require a mortgage of $585,000 to cover the remaining amount and they're not sure whether they could afford the monthly loan payments.  The bank has offered them a mortgage interest…

You are thinking about investing $5,000 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,750 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do? Answer: The intrinsic value of the investment in the landscaping business is $ two decimal places. No dollar sign, no comma) You (answer either "should" or "should not") invest in this landscaping business because the intrinsic value is (answer "greater" or "less") than $ (Round to (round to the nearest dollar. No dollar sign, no comma).