You just graduated from college and are starting your new job. You realized the importance to save for the future and have figured out that you will save $1,000 per month for the next 13 years; and then increase to $8,000 per month for the following 7 years. The amount accumulated at the end of these investments will be your retirement egg nest. You plan to start retirement and start withdrawing monthly amounts the following month (you will be in retirement for 29 years). If your required rate of return is 12% compounded monthly, how much are your monthly withdrawals?
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You just graduated from college and are starting your new job. You realized the importance to save for the future and have figured out that you will save $1,000 per month for the next 13 years; and then increase to $8,000 per month for the following 7 years. The amount accumulated at the end of these investments will be your retirement egg nest. You plan to start retirement and start withdrawing monthly amounts the following month (you will be in retirement for 29 years). If your required
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- Today is your 22nd birthday and you have just started your first job out of college. You decide that you will put $10,000 into a retirement account every year on your birthday until you retire. The first $10,000 deposit will happen on your 23rd birthday (in one year from today) and your last deposit will be on your 65th You plan to retire on your 65th birthday. If your investment earns an 8.5% annual return, how much will you have saved up when you retire?You are meeting with a financial planner to begin saving for retirement. Your starting salary is $65,000 in year one and you expect to receive pay increases at a rate of 3% each year for the first 30 years of your career, then maintain your salary until you retire. Your financial planner advised you to invest 10% of your yearly salary into a retirement account to maintain a similar lifestyle in retirement. You expect to work for the next 40 years. How much will you have in the account when you retire if your retirement account produces an average return of 9% per year?After graduation from university, you start working and you want to plan for your retirement. You will be retiring in 25 years and during your retirement, you plan to spend USD 20,000 per year. You expect your retirement to last 30 years. You believe you can earn 8% on your retirement savings. If you make annual payments into a retirement plan during your working life, how much will you need to save each year to reach your retirement goal? (You will make the first payment at the end of the year).
- You have heard about the impending retirement crisis facing the global community and you want to take action so you don't become a victim of this crisis. You have decided to start contributing a constant amount of $380 into your retirement account every month, beginning one month from today. You plan to keep making that same monthly contribution for 40 years and then you will retire. If your investments earn a rate of return of 7.74 percent, how much do you expect to be in your retirement account the day you retire? $1,420,649 $1,230,765 $997,472 $1,103,344You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4300 at the end of each year into a Roth IRA for the next 41 years. If you earn 8 percent compounded annually on your investment, how much will you have when you retire in 41 years? How much will you have if you wait 10 years before beginning to save and only make payments into your retirement account?You are trying to decide how much to save for retirement. Assume you plan to save $6,000 per year with the first investment made one year from now. You think you can earn 6% per year on your investments and you plan to retire in 43 years, immediately after making your last $6,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $6,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 18 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 18th withdrawal (assume your savings will continue to earn 6% in retirement)? d. If, instead, you decide to withdraw $100,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take…
- Every year, you receive your entire annual salary at the end of the year. This year, your end-of-year salary will be $50,000 (in nominal terms). In real terms, you expect your salary to increase at a rate of 2% per year in the future. You have decided to start saving for retirement by putting money in a savings account. You plan to retire in 35 years, and you expect to live for 25 years after that. You assess that a reasonable lifestyle during those 25 years will require you to have, at the end of every year, a disposable income of $25,000 in real terms (i.e. the same purchasing power as $25,000 today). The nominal interest rate on your savings account is 8%, and it is expected to stay at that rate forever. The real interest rate is also expected to stay at its current level of 3.5%. How much money (in nominal terms) will you need to have in your savings account when you retire, in 35 years (end of year 35), in order to be able to enjoy the lifestyle that you find reasonable? HINT:…You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earns 7% per year. You cannot make withdrawals until you retire on your sixty-fifth birthday (i.e. in 35 years time). After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you turn 65. You estimate that to live comfortably in retirement, you will need $100,000 per year starting at the end of the first year of retirement and ending on your 100th birthday. You will contribute the same amount to the plan at the end of every year that you work. Required: a. How much money do you need to save for retirement? b. Based on your answer to part (a), how much do you need to contribute each year to fund your retirement?You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year with the first investment made one year from now. You think you can earn 6.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,500 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 16 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 16th withdrawal (assume your savings will continue to earn 6.0% in retirement)? d. If, instead, you decide to withdraw $191,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
- 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?You are 20 years old and decide to start saving for your retirement. You plan to save $5,500 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 66. Suppose you earn 7% per year on your retirement savings. a. How.much will you have saved for retirement? b. How much will you have saved if you wait until age 36 to start saving (again, with your first deposit at the end of the year)?You are 25 years old and decide to start saving for your retirement. You plan to save $4,000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 66. Suppose you earn 7% per year on your retirement savings. a. How much will you have saved for retirement? b. How much will you have saved if you wait until age 40 to start saving (again, with your first deposit at the end of the year)? a. How much will you have saved for retirement? The amount that you will have accumulated for retirement is $ (Round to the nearest dollar.) b. How much will you have saved if you wait until age 40 to start saving (again, with your first deposit at the end of the year)? The amount that you will have accumulated for retirement is $ (Round to the nearest dollar.)