You estimate that by the time you ret years, you will have accumula a. If the interest rate is 9.5% and you live 15 years after retirement, what annual level of expenditure will those savings support? (Do not round intermediate calculations. Enter your answer in whole dollars rounded to 2 decimal places.) Annual expenditure $ Real annual expenditure 293,809.56 b. Unfortunately, inflation will eat into the value of your retirement income. Assume a 4% inflation rate and work out a spending program for your $2.3 million in retirement savings that will allow you to increase your expenditure in line with inflation. What will be your expenditure amount in real terms for each year of your retirement? (Do not round intermediate calculations. Enter your answer in whole dollars rounded to 2 decimal places.)

You estimate that by the time you ret years, you will have accumula a. If the interest rate is 9.5% and you live 15 years after retirement, what annual level of expenditure will those savings support? (Do not round intermediate calculations. Enter your answer in whole dollars rounded to 2 decimal places.) Annual expenditure $ Real annual expenditure 293,809.56 b. Unfortunately, inflation will eat into the value of your retirement income. Assume a 4% inflation rate and work out a spending program for your $2.3 million in retirement savings that will allow you to increase your expenditure in line with inflation. What will be your expenditure amount in real terms for each year of your retirement? (Do not round intermediate calculations. Enter your answer in whole dollars rounded to 2 decimal places.)

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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Suppose the interest rate is 6.9 APR with monthly compounding. What is the present value of an annuity that pays $110 every three months for five years? (Note: Be careful not to round any intermediate steps less than six decimal places.) Question content area bottom Part 1 The present value of the annuity is $ enter your response here. (Round to the nearest cent.)
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 30 years (based on family history, you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. EClick 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 present value table.) E (Click the icon to view the future value table.) To make your plan work answer the following questions: 1 (Click the icon to view the questions.)
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At the moment you don't have any money saved for retirement, but have resolved to start making $425 monthly payments (starting one month from today) into an account expected to earn an effective annual rate of 9.9%. Given that plan, how many years will it take for you to accumulate $2.4 million? (Use excel or a financial calculator)
You started an investment account 10 years ago with $2100, and it now has grown to $8900. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the investment account earns 11% per year from now on, what will the account's value be ten years from now? a. The annual rate of return is%. (Round to two decimal places.) View an example Get more help - Clear all
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $3,000 per month for 15 years, if the account earns 7% per year PV = $ Need Help? Read I Watch It
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