About the retirement account

Assignment Help Financial Management

Reference no: EM13868523

Ella Funt would like to set up her retirement account that will begin in 30 years. To play it safe, she wants to assume that she will live forever and she will withdraw $160,000 annually. Assuming her account will earn 10% interest during the next 30 years and 6% interest afterwards forever, how much will Ella need to save annually over the next 30 years to fund her retirement account?

Reference no: EM13868523

Questions Cloud

What is its unlevered beta : Bailey and Sons has a levered beta of 1.4, its capital structure consists of 40% debt and the rest is in equity, and its tax rate is 30%. What would Bailey's beta be if it used no debt, i.e., what is its unlevered beta?

What is the new rate of exchange : A country, whose currency had been pegged at 9 pounds per dollar, has just announced a devaluation of 20%. What is the new rate of exchange (European terms)?

What spot rate of exchange year : A US investor has $10 million to invest in interest-bearing securities for one year. He can invest in US dollars at 2 ¾ % p.a. or in pounds sterling at 4 ½ % p.a. The current spot rate (American terms) is 1.8172 dollars per pound. At what spot rate o..

Vanadian currency-the plumbum : A year ago the Vanadian currency, the plumbum (VAP), had a mid-rate of VAP 6.5 to the dollar. Today it is VAP 8.7 per dollar. Has the VAP appreciated or depreciated against the dollar? By what percentage?

About the retirement account : Ella Funt would like to set up her retirement account that will begin in 30 years. To play it safe, she wants to assume that she will live forever and she will withdraw $160,000 annually. Assuming her account will earn 10% interest during the next 30..

Trend or force in each of specified microenvironments : Identify one trend or force in each of the specified microenvironments (the company, suppliers, marketing intermediaries, competitors, publics, and customers) and describe how it would affect 'your' company.

Calculate present value of each contract at effective rate : They present you with three contracts, giving you a choice of the three: You decide to calculate the present value of each contract at effective rates 4%, 5% and 6%, and to then decide. Make those calculations. What do you conclude?

Suppose that you have placed money in two funds : Suppose that you have placed money in 2 Funds: Fund A and Fund B. Fund A accumulates at 9% effective and Fund B at 8% effective. At the end of 10 years, the total of the two funds is 52,000. At the end of 8 years, the amount in Fund B is three times ..

Effective interest rates that would in fact make : You have just put your house up for sale. The agent tells you that two offers have been made: (1) 400,000 now and 400,000 in 2 years; and, (2) 287,500 now, 237,500 in 1 year and 275,000 in 2 years. Your agent says that one offer seems “just as good” ..

User Account

All Pages