About the fixed retirement income

Assignment Help Financial Management

Reference no: EM131068979

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5.5%. He currently has $100,000 saved, and he expects to earn 9% annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal?

Reference no: EM131068979

Questions Cloud

Existence of business ethics : Many scholars have argued on the existence of business ethics, instead favoring the term corporate social responsibility (CSR). Write a three-page research assignment on CSR. In this assignment, you need to:

Planning on analyzing the situation : Sales at The Style Shop, a clothing store for men, have declined for the third month in a row. Your boss is not sure whether this decline is due to the weak economy or some other unknown reason.

Positive probability of overall profit : Suppose you buy a call on a share and short sell 1 share. It may seem at first, e.g., by sketching a profit/loss diagram, that it is possible to adjust the strike price of the call to get a portfolio with zero loss potential but a positive (nonzero) ..

What you understand by the accounting concepts mentioned : With reference to the above statement describe what you understand by the accounting concepts mentioned and provide examples from your selected annual report.

About the fixed retirement income : Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. He currently..

Which product is the most profitable : Which product is the most profitable? Why doesn't Mexicana just produce that product and forget about the others? What are some of the inputs that Mexicana uses to produce its products?

Lower tax bracket and cannot use the depreciation expense : A firm may choose to lease if: a)it is in a lower tax bracket and cannot use the depreciation expense b) it depreciates the asset c) the present value of its cash outflows under leasing is larger d) the asset's residual value is large.

What is the role of the sec in monitoring business activitie : What is the role of the SEC in monitoring business activities? What is the Sarbanes-Oxley Act of 2002, and do you think it is effective given the cost of compliance? If Tom, a high-power executive, is charged with fraud by the SEC, what civil and cri..

Social responsibility of business was to increase profits : In 1970 Milton Friedman argued that the only social responsibility of business was to increase profits. Compare and contrast the evidence Freidman presents to back up his claim with that provided in the Homer-Dixon article.

User Account

All Pages