EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 44P
Summary Introduction
To determine: Amount withdrawn by person X at the end of 30th year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You decide to open an individual retirement account (IRA) at your local bank that pays 8%/year compounded annually. At the end of each of the next 40 years, you will deposit $4,000 into the account. Three years after your last deposit, you will begin making annual withdrawals. What annual amount will you be able to withdraw if you want the withdrawals to last. Solve, a. 20 years ? b. 30 years? c. Forever?
You are investing in a retirement account and plan to deposit $5,000 per year into the account for the next 20 years, starting from today. The account offers an annual interest rate of 6%. How much money will you have in your retirement account at the end of the 20-year period?
You plan to make a series of deposits in an
individual retirement account. You will deposit
$1,000 today, $2,000 in two years, and
$2,000 in five years. If you withdraw $1,500 in
three years and $1,000 in seven years,
assuming no withdrawal penalties and all
deposits and withdrawals are done at the
start of specific year, how much will you have
after eight years if the interest rate is 7
percent?
Chapter 5 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 5.A - Prob. 1PCh. 5.A - Prob. 2PCh. 5.A - Prob. 3PCh. 5.A - Prob. 4PCh. 5.A - Prob. 5PCh. 5.A - Prob. 6PCh. 5 - Prob. 1QTDCh. 5 - Prob. 2QTDCh. 5 - Prob. 3QTDCh. 5 - Prob. 4QTD
Ch. 5 - Prob. 5QTDCh. 5 - Prob. 6QTDCh. 5 - Prob. 7QTDCh. 5 - Prob. 8QTDCh. 5 - Prob. 9QTDCh. 5 - Prob. 10QTDCh. 5 - Prob. 11QTDCh. 5 - Prob. 12QTDCh. 5 - Prob. 13QTDCh. 5 - Prob. 14QTDCh. 5 - Prob. 15QTDCh. 5 - Prob. 16QTDCh. 5 - Prob. 17QTDCh. 5 - Prob. 18QTDCh. 5 - Prob. 19QTDCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- After retirement, you expect to live for 25 years. You would like to have a $95,000 income each year. The annual interest rate is 9 percent per year. Required: Calculate the amount of savings you have in your retirement account to receive this income. A) Assume that the payments start on the day of your retirement. B) Assume that the payments start one year after the retirement.arrow_forwardYou 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.arrow_forwardYou plan on retiring in 25 years. In order to increase your retirement income, you open a retirement. account today and make a $20,000 deposit. In addition, you will deposit $5,000 every year for the next 25 years. Your plan is to start making annual withdrawals of $50,000 from the account, after you retire. Assuming the account is earning 7% rate of interest, how many years will it take, after you retire, before. the funds in your account are completely exhausted. Please include a written answer in a text box. (Assume annual compounding)arrow_forward
- You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.arrow_forwardAt age 30, to save for retirement, you decide to deposit $300 into an IRA at the end of each month at an interest rate of 6% per year compounded monthly. How much will you have from the IRA when you retire at age 65? Use this formula: Find how much of the total amount is from interest.arrow_forwardSuppose you wish to retire at the age of 65 with $80,000 in savings. Determine your monthly payment into an IRA if the APR is 7.5% and you begin making payments at 20 years of age.arrow_forward
- A retirement plan investment guarantees to pay you, or your estate, a fixed amount each year for 20 years. At the time of retirement, you will have accumulated $310,360 to your credit in the plan. The plan anticipates earning 8% interest annually over the period you or your estate will receive the retirement benefits. Rounding to the nearest $10, how much will the annual retirement benefits payment be assuming the first payment occurs one year from your retirement date?arrow_forwardRetirement Investment Advisors, Inc., has just offered you an annual interest rate of 4.8 percent until you retire in 45 years. You believe that interest rates will increase over the next year and you would be offered 5.4 percent per year one year from today. If you plan to deposit $15,000 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit? Multiple Choice O $28,038.23 $19,633.62 $6,679.48 $38,549.42 $37,379.12arrow_forwardAs part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 5% interest compounded annually. (Round your answers to the nearest cent.) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year.arrow_forward
- You plan to place $1,200 per year into a Roth IRA. You expect to earn 6% APR and you will place this amount into the account for 35 years. How much will you have in the account in 35 years? Round to the nearest $1,000.arrow_forwardYou estimate you need to supplement your social security payments with monthly withdrawals of $1,400.00 per month from a private investment account during the first 23 years of your retirement. Assuming you can earn annual returns of 5.2% in your investment account during your retirement years, how much money do you need to have accumulated in your investment account by the day you retire in order to fund the aforementioned monthly withdrawals?arrow_forwardIn this question, consider that you are 60 years old and considering retirement. An insurance company offers to sell you the following Annuity in exchange for a portion of your IRA: • The Annuity commits to paying you 2,000 per month for the next 20 years, with the first payment to be made beginning one month from today. • Your price of the Annuity is $250,000 paid by you today from your IRA. The insurance company is rated AAA, but the investment is not FDIC insured like bank deposits. What is the expected annual rate of return on this investment? What is the Yield-on this investment? That is what is the annual expected rate of return? From an investment point of view, do you consider this a good investment today? Discuss why, or why not.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT