ZuoTi.Pro
Question

Assume that Social Security promises you $40,000 per year starting when you retire 45 years from today (the first $40,000 will get paid 45 years from now). If your discount rate is 4%, compounded annually, and you plan to live for 13 years after retiring (so that you will receive a total of 14 payments including the first one), what is the value today of Social Securitys promise? The value today of Social Securitys promise is S(Round to the nearest cent.)

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Value of after 44 vears Here 4 4.00% 14 5 AlInterest rate per annum BlNumber of vears 7 C Number of compoundings per per annum 8 A÷Cl Interest rate per period ( r 9 BxC Number of periods (n) 10 4.00% 14 Payment per period (P 40,000 Value of after 44 vears 12 13 422,524.92 (1+4%)^14)) 4% 40000x( 1-( 1 15 Value today $ 75,229.02-42252492/(14%)44

0 0
Add a comment
Know the answer?
Add Answer to:
Assume that Social Security promises you $40,000 per year starting when you retire 45 years from...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Assume that Social Security promises you $40,000 per year starting when you retire 45 years from...

    Assume that Social Security promises you $40,000 per year starting when you retire 45 years from today (the first $ 40,000 will get paid 45 years from now). If your discount rate is 7% , compounded annually, and you plan to live for 15 years after retiring (so that you will receive a total of 16 payments including the first one), what is the value today of Social Security's promise? Assume that Social Security promises you $40,000 per year starting...

  • Assume that Social Security promises you $30,000 per year starting when you retire 45 years from...

    Assume that Social Security promises you $30,000 per year starting when you retire 45 years from today (the first $30,000 will get paid 45 years from now). If your discount rate is 6%, compounded annually, and you plan to live for 18 years after retiring so that you will receive a total of 19 payments including the first one), what is the value today of Social Security's promise? The value today of Social Security's promise is $LI (Round to the...

  • Assume that Social Security promises you $48,000 per year starting when you retire 45 years from...

    Assume that Social Security promises you $48,000 per year starting when you retire 45 years from today (the first S48,000 will get paid 45 years from now). If your discount rate is 6%, compounded annually, and you plan to live for 14 years after retiring so that you will receive a total of 15 payments including the first one what is the value today of Social Security's promise? The value today of Social Security's promise is (Round to the nearest...

  • Assume that Social Security promises you $ 43 comma 000$43,000 per year starting when you retire...

    Assume that Social Security promises you $ 43 comma 000$43,000 per year starting when you retire 45 years from today​ (the first $ 43 comma 000$43,000 will get paid 45 years from​ now). If your discount rate is 7 %7%​, compounded​ annually, and you plan to live for 1818 years after retiring​ (so that you will receive a total of 1919 payments including the first​ one), what is the value today of Social​ Security's promise? The value today of Social​...

  • 00 per year starting when you retre 45 years from today the first S50 000 wil...

    00 per year starting when you retre 45 years from today the first S50 000 wil get pa d 45 rears from now) If your discount rate is 6%, compounded annually, and you plan to live fr 18 years after so that you will receive a total of 19 payments including the first one). what is the value today of Social Security's promise?

  • P 4-45 (similar to) E Question Help You are looking to buy a car and can...

    P 4-45 (similar to) E Question Help You are looking to buy a car and can afford to pay $190 per month. If the interest rate on a car loan is 0.73% per month for a 60-month loan, what is the most expensive car you can afford to buy? The amount that you can afford is S. (Round to the nearest dollar.) P 4-22 (similar to) Question Help You figure that the total cost of college will be $93,000 per...

  • You plan to retire in 30 years and plan on saving $15,000 annually, starting next year,...

    You plan to retire in 30 years and plan on saving $15,000 annually, starting next year, for the next 30 years. You expect to need $120,000 about 18 years from now for college tuition for your recently born daughter which must be paid out of these savings. You expect to live 35 years during retirement (the first retirement payment will be 31 years from today). 1. If you assume an interest rate of 8.15% over the entire period, how much...

  • Please help by providing explanations/step-by-step processes for solutions. Thank you in advance! 1. You are 20...

    Please help by providing explanations/step-by-step processes for solutions. Thank you in advance! 1. You are 20 years old. Starting at age 70 (in 50 years), it is expected that you will begin to receive a $1,500 monthly check from Social Security. You expect to live until you are 86 years old. Assuming a discount rate of 5%, what is the value today of the expected stream of Social Security payments? 2. 5. Suppose an investment promises to pay you $10,000...

  • You would like to retire in 16 years. Starting in 16 years you will receive your...

    You would like to retire in 16 years. Starting in 16 years you will receive your first of 198 monthly payments of $2,000. You will pay for your retirement by making monthly deposits for 16 years starting today. Find the size of these deposits if your funds will earn J12 =12%

  • Quantitative Problem 1: You plan to deposit $2,300 per year for 5 years into a money...

    Quantitative Problem 1: You plan to deposit $2,300 per year for 5 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. a. What amount will be in your account at the end of 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. b. Assume that your deposits will begin today. What amount will be in your account after 5 years? Do...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT