Your client's 401K account has an initial balance of $6,300 and has monthly contributions of $500....
Your client's 401K account has an initial balance of $6,300 and has monthly contributions of $500. It earns 6.5% annual interest, compounded monthly, for 34 years.
At the age of retirement, your client will "annuitize" their 401K balance and take monthly payments for 30 years.
Their investments during retirement will earn 4.5% per year, with monthly compounding. Inflation is 1.9% annually. What is the value of your client's monthly payments in real dollars?
Homework Answers
The monthly payment will be $2387.41
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Your client's 401K account has an initial balance of $6,300 and
has monthly contributions of $500....
Your client's 401K account has an initial balance of $5,600 and has monthly contributions of $100....
Your client's 401K account has an initial balance of $5,600 and has monthly contributions of $100. It earns 5% annual interest, compounded monthly, for 36 years. At the age of retirement, your client will "annuitize" their 401K balance and take monthly payments for 26 years. Their investments during retirement will earn 3% per year, with monthly compounding. Inflation is 3.3% annually. What is the value of your client's monthly payments in real dollars?
Assuming you have had $55,000 balance in your 401k account and your annual salary is $50,000,...
Assuming you have had $55,000 balance in your 401k account and your annual salary is $50,000, suppose from now on your employer will match your deposit in your 401k plan but the amount of match money will be capped by 6% of your salary. If you decide to input 8% of your salary in your 401k plan each month and expect to make 10% return, compounded monthly, at time when you retire, how much money will you have in your...
Show the excel formulas used Ex. 1 You have $5,000 in your savings account that pays...
Show the excel formulas used
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years and you can earn...
Assuming you have had $55,000 balance in your 401k account and your annual salary is $50,000,...
Assuming you have had $55,000 balance in your 401k account and your annual salary is $50,000, suppose from now on your employer will match your deposit in your 401k plan but the amount of match money will be capped by 6% of your salary. If you decide to input 8% of your salary in your 401k plan each month and expect to make 10% return, compounded monthly, at time when you retire, how much money will you have in your...
fv function use the fv function to compute the value of your 401k at the end...
fv function
use the fv function to compute the value of your 401k
at the end of 22 years assuming a contribution rate of 4%. (4% of
your monthly salary)
B FV function (1) - Excel Search Brandi Creech AutoSave OH File Home Insert Page Layout Formulas Data Review View Help HILIK A B C D E Name: Your score: 0% 2 You have just graduated from college, and are starting your first job at an annual salary of $60,000....
Show the excel formulas used and answer all questions Ex. 1 You have $5,000 in your...
Show the excel formulas used and answer all questions
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years...
Suppose that on your birthday you checked the balance on your retirement account and you decided...
Suppose that on your birthday you checked the balance on your
retirement account and you decided to make a $1,000 payment at the
end of every month until you retire at the specified age. If you
disreagard the inflation (i.e. we adjust payments and interest with
the inflation rate) and assume a 2% annual growth rate of your
retirement fund, how much money will you have at the time you
retire?
You may (and should) change the display format of...
please answer all in full 1. On your 1st birthday, you received a $10 savings account...
please answer all in full 1. On your 1st birthday, you received a $10 savings account earning 6% annually. How much will you have in the account on your 30th birthday if you don't withdraw any money before then? 2. Your partner just promised to you that he/she will give you a graduation gift by paying half of of a new car when you receive an MBA degree in 2 years. Suppose that you also have $9,000 to invest today...
Many employers provide 401K matching That is, once an employee has been with the firm for...
Many employers provide 401K matching That is, once an employee has been with the firm for a sufficient period (often one year), the firm will match the employee’s contributions to the firm’s available 401K plan up to a certain percentage. Assume that an employee has just become eligible for the firm’s matching plan. In this case, the firm will match the employee’s investments up to 6% of the employee’s salary. (If the employee contributes 1%, the company puts in 1%,...
Many employers provide 401K matching That is, once an employee has been with the firm for...
Many employers provide 401K matching That is, once an employee has been with the firm for a sufficient period (often one year), the firm will match the employee’s contributions to the firm’s available 401K plan up to a certain percentage. Assume that an employee has just become eligible for the firm’s matching plan. In this case, the firm will match the employee’s investments up to 6% of the employee’s salary. (If the employee contributes 1%, the company puts in 1%,...
Show the excel formulas used
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years and you can earn...
fv function
use the fv function to compute the value of your 401k
at the end of 22 years assuming a contribution rate of 4%. (4% of
your monthly salary)
B FV function (1) - Excel Search Brandi Creech AutoSave OH File Home Insert Page Layout Formulas Data Review View Help HILIK A B C D E Name: Your score: 0% 2 You have just graduated from college, and are starting your first job at an annual salary of $60,000....
Show the excel formulas used and answer all questions
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years...
Suppose that on your birthday you checked the balance on your
retirement account and you decided to make a $1,000 payment at the
end of every month until you retire at the specified age. If you
disreagard the inflation (i.e. we adjust payments and interest with
the inflation rate) and assume a 2% annual growth rate of your
retirement fund, how much money will you have at the time you
retire?
You may (and should) change the display format of...
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