Present value of annuity due= payment per period * [1-(1+i)^-n]/i *(1+i)
i = interest rate per period
n = number of periods
650000 = x * [1-(1+(5.75%/12))^-420]/(5.75%/12)
=>
payment amount x = 3597.76
Jane and John Smith have accumulated $650,000 for their retirement, which begins today. They plan to...
Jane and John Smith have accumulated $650,000 for their retirement, which begins today. They plan to receive monthly payments from their investments, which will be paid at the beginning of each month over the next 35 years based on their estimated life expectancy. If investments are accumulating at an after-tax annual rate of 5.75%, compounded monthly, what will be the payment amount that the Smiths will receive each month to the nearest dollar? Please be very thorough with work and...
Lauran Smith is planning for her and her husband Luke’s retirement. Both Luke and Laura expect to retire in 35 years (when they turn 65). The life expectancy of men is 75 years and the life expectancy of women is 85 years (i.e., assume that they die the day before their 75 th or 85 th birthday). During retirement (while they are living), the couple wants to withdraw $10,000 at the beginning of each year from their savings account- $5,000...
a.Laura Smith is planning for her and her husband Luke’s retirement. Both Luke and Laura expect to retire in 35 years (when they turn 65). The life expectancy of men is 75 years and the life expectancy of women is 85 years (i.e., assume that they die the day before their 75th or 85th birthday). During retirement (while they are living), the couple wants to withdraw $10,000 at the beginning of each year from their savings account- $5,000 for each...
John and Jane Smith are a middle class couple that spends $4,000.00 a month. If John and Jane want to retire at the age of 67 (and they are now 27): How much money will they be spending per month assuming 3% inflation? How much is that per year? Assume that social security is still in existence and will meet four tenths (or 40%) of their spending needs. Assume that John and Jane primarily save for retirement through their 401(k) plans at work....
John Smith is nearing retirement. He wants to purchase an annuity that will pay him $125,000 each year (with the first payment starting 1 year from now) for the next 30 years. The discount rate is 8%. How much money does he need to purchase this annuity today (assuming no commissions or extra fees by the company selling it to him)? Round to the nearest dollar
Question 17 An employee's retirement plan pays 500 dollars at the end of each month into an account that earns 4.8% yearly interest compounded monthly. What is the future value of this ordinary annuity after 20 years? Round to nearest dollar. Question 18 An employee's retirement plan pays 500 dollars at the end of each month into an account that earns 4.8% yearly interest compounded monthly. What is the future value of this ordinary annuity after 20 years? Round to...
Jane Smith wants to send her son Billy to college. Billy just turned 3 years-old today, September 1st, and should enter college on his 18th birthday. After doing some research, Jane finds out that the tuition cost today for a year of study in a good university in the US is about $50,000 payable at the beginning of the academic year (September 1st of each academic year). It takes, on average, 4 years to obtain a bachelor’s degree. In addition,...
John Smith is 30 years old and graduated from CSUSM some years back, with a Business degree and an emphasis in Marketing. John is currently employed as a Marketing Manager at a well-known corporation. He has progressed well in his career, with the ultimate goal of becoming the company’s CEO. John’s current salary of $78,000 has increased at an average rate of 5% per year, with routine merit raises, and he expects it keep increasing. John’s firm, ABC Corporation, has...
Josie has just become eligible to participate in her company’s retirement plan; she is excited as her company matches her contributions dollar for dollar in this plan. The plan averages an annual return of 7% interest compounded monthly. Josie is 35 years old and plans to retire at age 65. She receives her pay at the beginning of each month and contributes 10% of her gross monthly salary of $2,500 into her retirement plan. What is the total amount that...
John Smith is 30 years old and graduated from CSUSM some years back, with a Business degree and an emphasis in Marketing. John is currently employed as a Marketing Manager at a well-known corporation. He has progressed well in his career, with the ultimate goal of becoming the company’s CEO. John’s current salary of $78,000 has increased at an average rate of 5% per year, with routine merit raises, and he expects it keep increasing. John’s firm, ABC Corporation, has...