True or False: Given the amount needed at the beginning of the retirement period, the annual...

Question

Question

True or False: Given the amount needed at the beginning of the retirement period, the annual...

True or False: Given the amount needed at the beginning of the retirement period, the annual deposits needed during the working period can be found by solving for“PMT” in the FVA formula.

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Solution: The given statement is true.

since using excel, the PMT function in the FVA formula (i.e. future value of annuity) writes the amount of annual deposits needed during the working period to accumulate a desired sum at retirement.

Note: since, amount needed at the beginning of retirement period is a Future Sum thus, FVA is used instead of PVA.

Add a comment

Answer 2

Similar Homework Help Questions

True or False: Annuities are unequal cash flows that go on for a finite period of...

True or False: Annuities are unequal cash flows that go on for a finite period of time. There are 3 formulas on our formula sheet that contain the variable “PM True or False: We can determine which “PMT” we’re being asked to solve for by noting what the problem provides in terms of r and n. True or False: "When given the annual withdrawals desired during the retirement period, the FVA tells us the amount we should have accumulated...
True or False: Annuities are unequal cash flows that go on for a finite period of...

True or False: Annuities are unequal cash flows that go on for a finite period of time. True or False: We can determine which “PMT” we’re being asked to solve for by noting what the problem provides in terms of r and n. True or False: "When given the annual withdrawals desired during the retirement period, the FVA tells us the amount we should have accumulated by the time we begin the retirement period. True or False: Given the...
All the below are true or false: a) The principal part of a fixed mortgage loan...

All the below are true or false: a) The principal part of a fixed mortgage loan payment can be found by multiplying the periodic interest rate by the ending balance for a given period. b) For fixed-rate fully amortized mortgage loans, more of the fixed payment goes towards principal as we approach the end of the loan term. c) We can find the amount needed to pay off a fixed-rate fully amortized mortgage loan at any point in time by...

true or false: the real rate of return is the rate of return if computed in terms of the dollar amount obtained at the end of the period relative to the dollar amount given up at the beginning of the period

true or false: the real rate of return is the rate of return if computed in terms of the dollar amount obtained at the end of the period relative to the dollar amount given up at the beginning of the period
An employee has decided to make annual contributions over a 15-year period into a retirement fund....

An employee has decided to make annual contributions over a 15-year period into a retirement fund. She wants to make the first contribution of $10,000 one year from now (t=1). She then plans to increase her annual contribution by $1,000 each year for the remaining years. The fund is expected to earn 10% per year compounded annually. If she decides to retire in 15 years (from now), what equal annual amount can she withdraw annually for a period of 10...
Mr. Moore is 35 years old today and is beginning to plan for his retirement. He...

Mr. Moore is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each of the next 25 years so that he can retire at age 60. He expects to live to the maximum age of 80 and wants to be able to withdraw $25,000 per year from the account on his 61st through 80th birthdays. The account is expected to earn 10 percent per annum...

Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7%...

Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7% x Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 1999. Mills is expected to retire at the end of 2043 after 45 years of service. His retirement is expected to span 15 years. At the end of 2018, 20 years after being hired, his salary is $85,000. The company's actuary projects Mills's salary to be $320,000 at...
Product costs include direct materials, direct labor, and selling costs. True False Period costs are all...

Product costs include direct materials, direct labor, and selling costs. True False Period costs are all costs that are not product costs, such as office supplies. True False A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned. True False The valve chain is the set of activities that increase the value of an organization's product and services. True False Direct costs can be economically and easily traced...
You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement.

You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money. What annual contributions to the retirement fund will allow you to receive the $17,000 annuity? Use Appendix C and Appendix D for an approximate answer, but calculate your final answer using the formula and...

1. An investment that costs $36,500 will produce annual cash flows of $12,210 for a period...

1. An investment that costs $36,500 will produce annual cash flows of $12,210 for a period of 4 years. Given a desired rate of return of 10%, the investment will generate a (Do not round your PV factors and intermediate calculations. Round your answer to the nearest whole dollar): negative net present value of $2,204. positive net present value of $2,204. negative net present value of $38,704. positive net present value of $38,704. 2. The amount of the depreciation tax...

True or False: Given the amount needed at the beginning of the retirement period, the annual...

Homework Answers

Add Answer to:
True or False: Given the amount needed at the beginning of the retirement period, the annual...

Post as a guest

Earn Coins

True or False: Annuities are unequal cash flows that go on for a finite period of...

True or False: Annuities are unequal cash flows that go on for a finite period of...

All the below are true or false: a) The principal part of a fixed mortgage loan...

true or false: the real rate of return is the rate of return if computed in terms of the dollar amount obtained at the end of the period relative to the dollar amount given up at the beginning of the period

An employee has decided to make annual contributions over a 15-year period into a retirement fund....

Mr. Moore is 35 years old today and is beginning to plan for his retirement. He...

Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7%...

Product costs include direct materials, direct labor, and selling costs. True False Period costs are all...

You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement.

1. An investment that costs $36,500 will produce annual cash flows of $12,210 for a period...

True or​ False: Given the amount needed at the beginning of the retirement​ period, the annual...

Homework Answers