Again assuming that you plan to leave your heirs nothing

Assignment Help Finance Basics

Reference no: EM13616621

1. Current Salary ($156,372.31) According to financial planners, the average retiree requires approximately 70% of their last year's working salary to live comfortably in retirement. Assume that you want to earn a fixed amount of interest each year in retirement. Your goal is to spend only the interest and still live comfortably. And, you want to earn the interest forever so that what remains can be passed onto your children, donated your favorite charity, or donated in honor of your favorite finance professor. That is, you want to earn a fixed amount, each year, for an indefinite amount of time. If you retire at 60 and can earn a 5% return, how much must you have saved to earn the required amount of interest?

2. If you die when you are 90 years old, how much money will be left to bequeath?

3. What if instead of saving for someone else, you expect to live until you are 90 years old at which point you plan to have no money left at all. If you can earn 5% per year, how much must you have saved up at 60 to earn a 70% of your pre-retirement salary in interest each year until you are 90?

4. Assuming the latter scenario (you plan to leave nothing to your heirs), how much of the principle amount of money that you saved do you still have left after 5 years? Hint: Treat this like an amortizing loan. The amount that you saved is like the loan amount and the payments are the amount that you use each year to spend on expenses.

5. Again, assuming that you plan to leave your heirs nothing, how much will you have to put away each year if you start saving when you are 20 years old? What if you start saving when you are 30? What if you start saving at 45?

Reference no: EM13616621

Questions Cloud

An investment will pay 150 at the end of each of the next 3 : an investment will pay 150 at the end of each of the next 3 years 200 at the end of year 4 300 at the end of year 5 and

A smooth talking student has a 13 probability of talking a : a smooth talking student has a 13 probability of talking a policeman out of giving him a speeding ticket. the

What diameter must a copper wire have if its resistance is : what diameter must a copper wire have if its resistance is to be the same as that of an equal length of aluminum wire

Do you think the bank is taking more risk than its : a. explain the difference in the willingness of banks to provide loans to carson company why is there a difference

Again assuming that you plan to leave your heirs nothing : 1. current salary 156372.31 according to financial planners the average retiree requires approximately 70 of their last

What decision should be made by the optimistic decision : a payoff table is given asstate of naturedecisions1s2s3d11086d214152d3789a. what decision should be made by the

A car whose wheels are of radius r feet is driven at a : a car whose wheels are of radius r feet is driven at a speed v. a pebble is thrown from one of the wheels. for very

A dish of hot food has an emissivity of 039 and emits 15 w : a dish of hot food has an emissivity of 0.39 and emits 15 w of thermal radiation. if you wrap it in aluminum foil which

1 a 25 raise to 2500 per month 2 a base salary of 1000 plus : jim has been employed at gold key realty at a salary of 2000 per month during the past year. because jim is considered

User Account

All Pages