A1). Amount needed at retirement: PMT = -125,000; N = 25; rate = 6.5%; Mode (or type) = 0, solve for PV.
Amount required = 1,524,734.59
A2). PV = 0; FV = -1,524,734.59; N = 36; rate = 6.5%; Mode (or type) = 0, solve for PMT.
Annual deposits to be made = 11,455.82
A3). PV = 0; FV = -1,524,734.59; N = 36*12 = 432; rate = 6.5%/12 = 0.542%; Mode (or type) = 0, solve for PMT.
Monthly deposits to be made = 886.55
B). PV = 0; FV = -1,524,734.59; N = 31; rate = 6.5%; Mode (or type) = 0, solve for PMT.
Annual deposits to be made = 16,396.89
C). Lump sum deposit to be made today = retirement amount/(1+6.5%)^36 = 1,524,734.59/(1+6.5%)^36 = 157,982.28
D1). Value of employer contribution at retirement: PV = 0; PMT = -2,500; N = 36; rate = 6.5%; Mode (or type) = 0, solve for FV.
Value = 332,742.36
D2). Value of trust fund at retirement = trust fund payout*(1+ 6.5%)^20 = 50,000*(1+6.5%)^20 = 176,182.25
D3). Remaining amount needed at retirement = total amount - value of employer contribution - value of trust fund
= 1,524,734.59 - 332,742.36 - 176,182.25 = 1,015,809.97
D4). Annual deposits required:
PV = 0; FV = -1,015,809.97; N = 36; rate = 6.5%; Mode (or type) = 0, solve for PMT.
Annual deposits to be made = 7,632.11
THE SETUP: Your best friend Dave just celebrated his 24th birthday and wants to start saving...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
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This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account...
Question 6: This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into...
Your best friend Frank just celebrated his 30th birthday and wants to start saving for his anticipated retirement. Frank plans to retire in 35 years and believes that he will have 20 good years of retirement and believes that if he can withdraw $90,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Frank for all scenarios presented below is 8% per year. This is an annual rate, review each...
A. Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 74.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 74.0 when he fully retires, he will begin to make annual withdrawals of $138,548.00 from his retirement account until he turns 94.00. He he will make contributions to his retirement account from his 26th...