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- A) Your client is evaluating between the following two retirement options: Option 1: Pays a lump sum of $3.5 million in 6 years.
Option 2: A 25-year
B) Neal plans to buy a car worth $42,000 today. He is required to pay 15 percent as a down payment and the remainder is to be paid as a monthly payment over the next 12 months with the first payment due at t = 1. Given that the interest rate is 8% per annum compounded monthly, compute the approximate monthly payment. Discuss the impact of increase in interest rate on the monthly payment.
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- Mr. Z is about to retire, and he wants to buy an annuity that will provide him with $57,000 of income per year for 20 years, with the first paying coming immediately and future payments occurring at the BEGINNING of the respective years. The interest rate on this annuity is 8.50%. How much would it cost him to buy the annuity today? Group of answer choices $539,410.19 $538,439.25 $585,260.05 $655,491.26 $561,849.65Mr. Chew, a retiree, expects to live for the next 20 years and would like to receive a regular retirement income by purchasing an immediate annuity. His desired retirement income is $24,000 per year. The regular pay out is paid immediately on purchase of the annuity. The projected rate of return of the annuity product is 2.5%. To purchase the annuity today, how much Mr Chew would require a lump sum of?1) Today is your 30th birthday and you must choose between two retirement options. The first option will provide you with 10 equal annual payments of $100, 000 beginning on your 65th birthday. The second option will provide you with one payment of $1, 000, 000 on your 70th birthday. If the interest rate is 6 percent per year and you are assured of living to at least 80 years of age, which option is better? 2) A retirement home in Florida costs $200, 000 today. Housing prices in Florida are increasing at a rate of 4% per year. Joe wants to buy the home in 8 years when he retires. Joe has $25, 000 right now in a savings account paying 8% interest per year. Joe wants to make eight equal annual deposits into the savings account starting today. How much must each deposit be so Joe will have enough money in his savings account to buy the retirement home when he retires?
- Your mom is thinking of retiring. Her retirement plan will pay her either $200,000 immediately on retirement or $280,000 five years after the date of her retirement. Which alternative should she choose if the interest rate is: 0% per year? 8% per year? 20% per year?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) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years. What annual rate, compounded monthly, is required to ?accomplish this b) At retirement, a client has two payment options: a 20-year annuity at $50,000 per year starting after 1 year or a lump sum of $500,000 today. If the client's required rate of return on retirement fund investments is 6% per year, which plan has the higher present ?value and by how much
- You and your wife are making plans for retirement. You plan on living 25 years after you retire and would like to have $75,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retirement account will earn 15% annually. What amount do you need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent.$ Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent.$Your uncle is about to retire, and he wants to buy an annuity that will provide him with $7,000 of income a year for 25 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today?You plan to retire in 30 years and plan on saving $15,000 annually, starting next year, for the next 30 years. You expect to need $120,000 about 18 years from now for college tuition for your recently born daughter which must be paid out of these savings. You expect to live 35 years during retirement (the first retirement payment will be 31 years from today) If interest rate is 5%, but you want to keep the same retirement quality of life as if the interest rate is 8.15%. How much extra money do you need to save annually?
- A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which should last about 25 years. They believe that they can earn 9% interest 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. b) 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?A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which should last about 25 years. They believe that they can earn 9% interest 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. b) 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? Show workings and calculation with scientific calculaterGabriel plans to retire when he has $1,500,000 in his bank account, and he does not want to work more than 30 years. If this account has a APR of 5.4%, determine the minimum monthly annuity payment he would need to make. Round your answer to the nearest dollar.