Accumulate in your account by the time you retire

Assignment Help Financial Management
Reference no: EM131560270

You plan to retire at age 40 after a highly successful but short career. You would like to accumulate enough money by age 40 to withdraw $230,000 per year for 40 years. You plan to pay into your account 15 equal installments beginning when you are 25 and ending when you are 39. Your account bears interest of 14 percent per year. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

1. How much do you need to accumulate in your account by the time you retire? (Round your final answer to the nearest dollar amount.)

2. How much do you need to pay into your account in each of the 15 equal installments? (Round your final answer to 2 decimal places.)

Reference no: EM131560270

Questions Cloud

Apply different ethical standards to various parts : Some individuals apply different ethical standards to various parts of their lives.
What is the default risk premium on solohan bonds : What is the default risk premium (DRP) on Solohan's bonds?
Evaluate the manager based on the portfolio alpha : Evaluate the manager based on the portfolio alpha.
What is the fixed asset turnover : Windswept, Inc. 2010 Income Statement ($ in millions) Net sales $ 14,450 Less: What is the fixed asset turnover?
Accumulate in your account by the time you retire : How much do you need to accumulate in your account by the time you retire? How much do you need to pay into your account in each of the 15 equal installments?
What is the value of european call option : What is the value of a European call option if the underlying stock price is $65, the strike price is $70, the underlying stock volatility is 51 percent, and th
What is the yield ratio between the two securities : Determine the equivalent taxable yield on the muni. What is the yield ratio between the two securities?
What is the cost of equity-market capitalization rate : Suppose Pears, Inc. currently pays a dividend of $1.75 per share. What is the cost of equity (market capitalization rate) for CB?
Describe the credit risk and explain how it can be measured : Describe the credit risk and explain how it can be measured. Describe the price risk. How does monetary policy affect price risk?

Reviews

Write a Review

Financial Management Questions & Answers

  What are the break-even levels of ebit for each plan

what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan?

  What is the estimated value of rolens preferred stock

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 8% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually. What is the estimated value of Rolen's preferred s..

  Compute the standard deviation of annual cash flows

Mitchell Auto Parts Inc. has estimated the probability distribution of its annual net cash flows as follows: Compute the expected annual cash flow. Compute the standard deviation of annual cash flows. Compute the coefficient of variation of annual ca..

  What must the coupon rate be on these bonds?

What must the coupon rate be on these bonds?

  What is this projects equivalent annual cost

A five-year project has an initial fixed asset investment of $360,000, an initial NWC investment of $40,000, and an annual OCF of −$39,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required re..

  Cash flow statement disclosure

Cash Flow Statement Disclosure You have been hired as a staff accountant by a small company that recently completed an initial public offering (IPO) of its common stock. At its inception, the company had been ?nanced by Pegasus, an investment group. ..

  Characteristics of common stock

All of the following are characteristics of common stock except the:

  Calculate percentage changes in eps when economy expands

RAK, Inc., has no debt outstanding and a total market value of $220,000. Earnings before interest and taxes, EBIT, are projected to be $26,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 15 percen..

  The relationship between boom and the market

If BOOM inc. has a Beta of 1.3 and the current riskfree rate is 3.5% and the market return is expected to be 11% What is the expected return of BOOM inc stock? What if over the next year the actual market return ended up being 8% what return would yo..

  What is the average dividend growth rate

What is the average dividend growth rate?

  Question if the beta of exxon mobil is 065 risk-free rate

question if the beta of exxon mobil is 0.65 risk-free rate is 4 and the market rate of return is 14 evaluate the

  What will your outlook towards maintenance of liquid assets

What will your outlook towards maintenance of liquid assets to ensure that the firm has adequate cash in hand to meet its obligations at all times?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd