Your employer automatically puts 5 percent of your salary into a 401(k) retirement account each year. The account earns 7% interest. Suppose you just got the job, your starting salary is $60000, and you expect to receive a 2.5% raise each year. For simplicity, assume that interest earned and your raises are given as nominal rates and compound continuously. Find the value of your retirement account after 25 years Value = $
Q: Suppose a recent college graduate's first job allows her to deposit $150 at the end of each month in…
A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where, r =rate of return per period i.e. 6%/12 =…
Q: Luis has $160,000 in his retirement account at his present company. Because he is assuming a…
A: Given: Amount in retirement account = $160,000 Annual payment = $2,000 Years =22 Interest rate = 8%
Q: Your first job out of college will pay you $81,000 in year 1 (exactly one year from today). You…
A: C1 = $81,000 in year 1Salary growth rate, g = 7% per yearC2 = C1 x (1 + g)C3 = C2 x (1 + g) = C1 x…
Q: When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be…
A: Annuity is the no. of payments which are equal in size and made in equal interval of time. Person…
Q: How much (in $) would the account be worth after 10 years?
A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: As part of your retirement plan, you have decided to deposit $9,000 at the beginning of each year…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub- parts…
Q: Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month in…
A: Calculation of amount at the end of 25 years is shown below: Hence, Amount to be received at the…
Q: You will need to deposit $_______ each quarter.
A: Future Value of Annuity: It is computed by compounding the present stream of annuity cash flows…
Q: Suppose you want to have $300,000 in the bank when you retire in 45 years and the bank pays 3%…
A: given, rate = 3% no of years= 45 FV= 300,000
Q: 0% match on your investment to a 401k retirement plan. If you decide to contribute a monthly amount…
A: The given problem can be solved using FV function in excel. FV function computes amount balance in…
Q: 1. Suppose you are paid $2400 per month and your employer's 401(k) matches your contributions by 50%…
A: The question is based on the calculation of future value of deposit made in retirement account…
Q: You want to be able to withdraw $30,000 from your account each year for 25 years after you retire.…
A: in this problem you have to calculate present value of retirement amount and that will be retirement…
Q: As part of your retirement plan, you have decided to deposit $9,000 at the beginning of each year…
A: Note:- “Since you have asked multiple questions, we will solve the first question for you. If you…
Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Starting at age 25, you deposit $2,000 a year into an IRA account. Treat the yearly deposits into…
A:
Q: Your employer automatically puts 10 percent of your salary into a 401(k) retirement account each…
A: If the amount of contribution incurred by a person increases, then it is known as growing annuity.…
Q: Your employer offers a 401(k) plan with a 17% match, and you set a goal of retiring in 35 years with…
A: Given: Value today = $1.1 million or $1100000 Inflation rate = 1.5% Annual rate = 1.2% Number of…
Q: You have just made your first $1,500 contribution to your retirement account. Assume you earn a…
A: FV = PV(1 + r)t FV= Future Vale PV = Present Value r= rate of interest t = time in years
Q: Your employer offers a 401(k) plan with a 16% match, and you set a goal of retiring in 31 years with…
A: 401(k) is a type of retirement plan which allows investor to accumulate funds for retirement by…
Q: As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: You are expecting to retire in 28-years and you want to retire with $10,000,000. How much you must…
A: Given information: Future value is $10,000,000 Present value is $122,000 Number of years is 28…
Q: what is the value of your retirement plan after the 40 years?
A: A retirement plan is the planning for retirement. It is an investment plan, whereby the investor…
Q: Your client's 401K account has an initial balance of $6,900 and has monthly contributions of $500.…
A: Future value is the value of an asset in the future. Future value estimation is very important for a…
Q: 1. An employee plans on working and contributing to his retirement account monthly for 30 years and…
A: According to the rule, because you have posted multiple questions, we will answer the first question…
Q: As part of your retirement plan, you have decided to deposit $9,000 at the beginning of each year…
A: Since you have asked a question with multiple sub-parts, we will solve the first three questions for…
Q: You have just made your first $4,000 contribution to your retirement account. Assuming you earn an 9…
A: a) Computation:
Q: You want to be able to withdraw $1, 500 from your account each month for 20 years after you retire…
A: The given problem can be solved using PV and PMT function in excel. PV function computes current…
Q: You want to be able to withdraw $50,000 from your account each year for 25 years after you retire.…
A: Here, Annual amount to withdraw = $50,000 Time in years after retirement = 25 years Time to…
Q: Your beginning salary is $70,000. You deposit 12% at the end of each year in a savings account that…
A: Given information: Beginning salary is $70,000 Interest rate is 3% Initial payment of 12% Salary…
Q: You want to be able to withdraw $35,000 from your account each year for 25 years after you retire.…
A: Given Information:- in the question, you want to withdrawal $35000 each year from you bank account…
Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of…
A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: 1. Suppose you are paid $2400 per month and your employer's 401(k) matches your contributions by 50%…
A: Annuity refers to series of equalized payments that are paid or received at start or ending of…
Q: Tony Sanchez plans to retire and to withdraw 10 annual withdrawals that will start at P60,000 at the…
A: The initial deposit will be the sum of the present value of all the withdrawals in the future.
Q: When you retire at 65, you wish to be able to have $3,000 each month for 25 years. How much would…
A: Firstly calculate the present value of annuity with $3000 as PMT and 25 years, use this present…
Q: Suppose you want to have $800,000.00 for retirement in 30 years. You plan to make regular monthly…
A: Monthly deposit It is the minimum value a person will deposit in an account every month. It is the…
Q: How much money has accrued in the account at the end of the 14 years? (Round your answer to the…
A: Case i. Money accrued in the account at the end of the 14 years: Future value of annuity formula =…
Q: You want to be able to withdraw $25,000 from your account each year for 25 years after you retire.…
A: Here, Withdrawal Amount is $25,000 Time Period of Withdrawal (Withdrawal Period) is 25 years Time…
Q: You want to be able to withdraw $40,000.00 from your account each year for 15 years after you…
A: Time Value of Money (TVM): It is based on a principle that the money in hand now has more value than…
Q: You want to supplement your retirement income through a retirement account. You have 15 years left…
A: First withdrawl amount is $15,000 Growth rate is 5% Starting year of Withdrawal is 16th Ending Year…
Q: Assume that you contribute $150 per month to a retirement plan for 15 years. Then you are able to…
A: This question provides that $ 150 per month for 15 years and increases the $ 350 per month for next…
Q: You are saving for your retirement. You have decided that one year from today you will deposit…
A: First payment, A = 5% x Annual salary a year later = 5% x 90,000 x (1 + 2%) = $ 4,590.00 Growth rate…
Q: Marcia Kincaid has just begun working for a company that offers a pension plan. This plan guarantees…
A: Total amount she got = 5400*20*12 = 1296000
Q: a. Suppose that between the ages of 22 and 32, you contribute $7000 per year to a 401(k) and your…
A: The future value function or concept can be used to determine the future value of a present sum or…
Q: Your employer contributes $50 a week to your retirement plan. Assume that you work for your employer…
A: Present Value of annuity refers to the present value of all the future payments of and series of…
Q: You expect to retire in 25 years. After you retire, you want to be able to withdraw $3000 dollars…
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…
Q: You want to be able to withdraw $35,000 from your account each year for 20 years after you retire.…
A: The concept of the time value of money states that the current worth of money is more than its value…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Your employer automatically puts 5 percent of your salary into a 401(k) retirement account each year. The account earns 8% interest. Suppose you just got the job, your starting salary is $60000, and you expect to receive a 2.5% raise each year. For simplicity, assume that interest earned and your raises are given as nominal rates and compound continuously. Find the value of your retirement account after 15 years Value = SYour employer automatically puts 5 percent of your salary into a 401(k) retirement account each year. The account earns 10% interest. Suppose you just got the job, your starting salary is $45000, and you expect to receive a 3% raise each year. For simplicity, assume that interest earned and your raises are given as nominal rates and compound continuously. Find the value of your retirement account after 35 years Value = $69845.88 XYour employer automatically puts 10 percent of your salary into a 401(k) retirement account each year. The account earns 8% interest. Suppose you just got the job, your starting salary is $45000, and vou expect to receive a 4% raise each year. For simplicity, assume that interest earned and your raises are given as nominal rates and compound continuously. Find the value of vour retirement account after 35 years Value = $ 262549.28 Preview
- Suppose that starting at age 25, you make steady contributions to a retirement account (with initial balance 0). What should your yearly contribution be if you want to have a balance of $815,000 after 40 years? Assume your account will earn 7% interest, compounded continuously. (Round your answer to the nearest dollar.)Suppose that you'd like to retire in 40 years and you want to have a future value of $ 500000 in a savings account. Also suppose that your employer makes regular monthly payments into your retirement account. If you can expect an APR of 7.5% for your account, how much do you need your employer to deposit each month? Employer Contribution = The formulas we have been using assume that the interest rate is constant over the period in question. Over a period of 40 years, though, interest rates can vary widely. To see what difference the interest rate can make, let's assume a constant APR of 4% for your retirement account. How much do you need your employer to deposit each month under this assumption? Employer Contribution = rate dic restSuppose you are paid $2400 per month and your employer's 401(k) matches your contributions by 50% up to a maximum of 10% of your pay. Assuming you max-out your retirement savings and you work for 30 years, how much will the 401(k) be worth when you retire (if you can get an APR of 8% during your work years)?
- For 40 years, you invest $200 per month at an APR of 4.8% compounded monthly, then you retire and plan to live on your retirement nest egg. a) How much is in your account on retirement? b) Suppose you set up your account as a perpetuity on retirement. What will your monthly income be? (Assume that the APR remains at 4.8% compounded monthly.) c) Suppose now you use the balance in your account for a life annuity instead of a perpetuity. If your life expectancy is 21 years, what will your monthly income be? (Again, assume that the APR remains at 4.8% compounded monthly.) d) Compare the total amount you invested with your total return from part c. Assume that you live 21 years after retirement.Suppose that you'd like to retire in 40 years and you want to have a future value of $ 800000 in a savings account. Also suppose that your employer makes regular monthly payments into your retirement account. If you can expect an APR of 7.5% for your account, how much do you need your employer to deposit each month? Employer Contribution = The formulas we have been using assume that the interest rate is constant over the period in question. Over a period of 40 years, though, interest rates can vary widely. To see what difference the interest rate can make, let's assume a constant APR of 4% for your retirement account. How much do you need your employer to deposit each month under this assumption? Employer Contribution =Suppose that between the ages of 22 and 32, you contribute $8000 per year to a 401(k) and your employer contributes $4000 per year on your behalf. The interest rate is 7.67.6% compounded annually. (a) What is the value of the 401(k) after 10 years? (b) Suppose that after 10 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the 401(k). How much money will you have in the plan when you reach age 65? (c) What is the difference between the amount of money you will have accumulated in the 401(k) and the amount you contributed to the plan?
- 1. Assume that you begin saving 3% of your total income in an employer-provided retirement plan at work. How long will it take for you to be saving at least 20% of your income if your employer provides a 4% wage increase yearly and you save half of each year's increase? 2. Based on your calculations from part a. how much will you be saving (using the end-of- year savings rate) over the next 10 years if you earn $30,000 this year?Suppose that your retirement benefits during your first year of retirement are $60,000 per year which is just enough to meet your cost of living during the first year. However, your cost of living is expected to increase at an annual rate of 5% due to inflation. If there is no cost-of-living adjustment in your retirement pension, then some of your future living cost has to come from savings other than retirement pension. If your saving account earns 7% interest a year, how much should you set aside in order to meet this future increase in the cost of living for 25 years? O $428,985.67 O S1,128,200.66 O $699,214.99 O $34,960.75Suppose you want to have $700,000 for retirement in 25 years. Your account earns 9% interest.a) How much would you need to deposit in the account each month?$b) How much interest will you earn?$