Harold Filbert is 30 years of age and his salary next year will be $20,000. Harold forecasts that his salary will increase at steady rate of 5 percent per annum until his retirement at age 60. If the interest rate is 8percent, what is the PV of his last salary payment?
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12. Harold Filbert is 30 years of age and his salary next year will be $20,000. Harold
his salary will increase at steady rate of 5 percent per annum until his retirement at age 60.
If the interest rate is 8percent, what is the PV of his last salary payment?
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- Assume that you are 30 years old today (t=0), and that you plan to retire at age of 65 (t=35). Your annual salary is $65,000 in the coming year (t=1), and you expect your salary to increase at a rate of 5 percent annually as long as you work. You have two financial goals for your retirement. First, you expect to spend 48,000 per year for 20 years after your retirement. The first expense will be one year after retirement (t=36). Second, you expect to leave $2,000,000 to your daughter on your 80th Birthday (t=50). To save for your retirement, you plan to make annual contributions to a retirement account. Your first contribution will be made on your 31st birthday (t=1) and will be a fixed percentage of this year’s salary. Likewise, you expect to deposit a fixed percentage of your salary each year until you reach age of 65 (t=35). Assume that the interest rate is 10 percent. Also assume incomes and expenses occur at the end of each year unless specified differently a) What is the future…7. You have just made your first P2,000 contribution to your individual retirement account. Assuming you earn a 10 percent rate of return and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? 8. You are scheduled to receive P30,000 in two years. When you receive it, you will invest it for six more years at 6.5. percent per year. How much will you have in eight years? 9. The first comic book featuring Superman was sold in 1938. In 2003, the estimated price for this comic book in good condition was about P350,000. This represented a return of 26.09 percent per year. For this to be true, what must the comic book have sold for when new? 10. You are trying to save to buy a new P150,000 car. You have P40,000 today that can be invested at your bank. The bank pays 5.5. percent annual interest on its accounts. How long will it be before you have enough to buy the car?You have just made your first $4,300 contribution to your retirement account. Assume you earn a return of 12 percent per year and make no additional contributions. What will your account be worth when you retire in 28 years? What if you wait 10 years before contributing?
- Suppose that you earn $45,600 per year. What is your monthly salary? $ Assume that you deposit 10% of your monthly salary into an investment account with an APR of 4.8% every month for 30 years. We will assume for simplicity that your salary never changes, so you are depositing the same amount every month for 30 years. What will the balance of your investment account be after 30 years? Round your answer to the nearest cent. The balance of the account is $ How much of the investment account balance is interest? The amount of interest in the account is $You are saving for your retirement. You have decided that one year from today you will deposit 5percent of your annual salary in an account which will earn 6percent per year. Your salary currently (today) is $90,000, and it will increase at 2 percent per year throughout your career. How much money will you have for your retirement, which will begin in 40years? Assume your first payment into the account is one year from today after your first increase.In other words, your next year’s paycheck (Year 1) is more than $90,000since it will increase by 2% each year. (Suppose you are 30 years old and would like to retire at age 60. Furthermore, you would like to have a retirement fund from which you can draw an income of $50,000 per year–forever! How much would you need to deposit each month to dothis? Assume a constant APR of 8% and that the compounding and payment periods are the same.
- Suppose you are 35 years old and would like to retire at age 60. Furthermore, you would like to have a retirement fund from which you can draw an income of $50 comma 000 per yeardash forever! How much would you need to deposit each month to do this? Assume a constant APR of 7% and that the compounding and payment periods are the same.Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase the contribution to $266 per month for another 20 years, and finally, $416 per month for the last 10 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years?If John wants to retire with $10,000 per month, how much principal is necessary to generate this amount of monthly income if the interest rate is 15%?t
- 2. You want to begin saving for your retirement. You plan to contribute $12,000 to the account at the end of this year. You anticipate you will be able to increase your annual contributions by 3% each year for the next 45 years. If your expected annual return is 8%, how much do you expect to have in your retirement account when you retire in 45 years? [An investor is 50 years of age today. He will retire at the age of 60. In order to receiveTk. 200,000 annually for 10 years after retirement, how much amount should he investat the time of retirement? Assume the required rate of return is 10 percent.Imagine you just finished 30 years-old, earning $120,000 pre-tax per year paid at the end of each year. Assume you have no financial asset or explicit liabilities. Your salary grows 1% per year until you retire at the end of age 65 (35 full years of working). After retirement, you are entitled to receive a pension paying 50% of your last salary for the rest of your life (your pension would remain constant). Assume a valuation rate of 5% and a planning horizon to age 95 (30 full years of retirement). Your current subsistent consumption is $20,000 (paid at the end of the year). You expect your subsistent consumption to grow at rate of 2% until the end of age 95. Your goal is to maintain a constant discretionary consumption (standard of living) for the rest of your life. You should pay taxes according to the table below. Brackets AVERAGE tax rate $0 to $100,000 30% $100,0000 to infinity 40% Please answer: Part A: If you put your savings in a TFSA account, what is the highest real &…
