You are trying to calculate how much money you should have at retirement. On your 60th birthday you will retire and immediately make your first withdrawal of $4,482.06. You plan to make 24 such withdrawals each year. You plan to continue withdrawing at that level and frequency until you are 90 years old. (Assume beginning of period withdrawals with the first withdrawal on your retirement date and no withdrawal on your final birthday.) During retirement your savings will earn only 3.5% per annum. How much do you have to have saved at retirement to fund these planned withdrawals?

You are trying to calculate how much money you should have at retirement. On your 60th birthday you will retire and immediately make your first withdrawal of $4,482.06. You plan to make 24 such withdrawals each year. You plan to continue withdrawing at that level and frequency until you are 90 years old. (Assume beginning of period withdrawals with the first withdrawal on your retirement date and no withdrawal on your final birthday.) During retirement your savings will earn only 3.5% per annum. How much do you have to have saved at retirement to fund these planned withdrawals?

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

See similar textbooks

Similar questions

You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 26th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 4%, how much must you set aside each year to make sure that you will have $2 million in the account on your 65th birthday?
You are saving for retirement. To live comfortably, you decide you will need to save $4 million by the time you are 65. Today is your 34th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 3%, how much must you set aside each year to make sure that you will have $4 million in the account on your 65th birthday? The amount to deposit each year is $(Round to the nearest dollar.)
You are saving for retirement. To live comfortably, you decide you will need to save $3 Million by the time you are 65. Today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 8%, how much must you set aside each year to make sure that you will have $3 Million in the account on your 65th birthday? The amount to deposit each year is _________ (Round to the nearest dollar.)
You want to be able to withdraw $20,000 from your account each year for 30 years after you retire. You expect to retire in 25 years. If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
You are saving for retirement. To live comfortably, you decide you will need to save $1 million by the time you are 65. Today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 4%, how much must you set aside each year to make sure that you will have $1 million in the account on your 65th birthday?
You want to save money for retirement. Your savings pattern is as follows: First 5 years: You save $2200 each year Next 14 years: In the óth year, you save $2100 and decrease your savings by $100 in each following year. How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per year?
You just received $225,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 25 years from today. How much more will you have in your account on the day you retire if you can earn an average return of 10.5 percent rather than just 8 percent?
Darnell Johnson wants to know if he can retire in 35 years at age 60, when he plans to do a lot of fishing. Assume the deposit into his retirement account averages $3800 at the end of each year and that the funds earn 6% per year. find amount of annuity and the interest earned.
You decide to make monthly payments into a retirement fund earning 4.75% compounded monthly. Note: Payments are made at the end of each period.
Raghubhai
Your retirement account has a current balance of $3, 123. What interest rate would need to be earned in order to accumulate a total of $5,000,000 in 24 years by adding $3,123 annually? Is this possible? Why or why not?
You plan on retiring in exactly 6 years and you would like to have a retirement fund balance of exactly $2,000,000 at that time. You are convinced that you can earn an APR (based on monthly compounding) of 5.1%. If you are making beginning-of-the-month payments into the account, how much does each one of the payments need to be in order to reach your target? To nearest $0.01

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS