Annual payment at end of each year to fund their retirement

Assignment Help Financial Management

Reference no: EM131813635

Allison and Nick anticipate they will require an annual income of $50,000 (in current dollars) when they retire 15 years from now. They expect to receive Social Security benefits of $20,000 per year at that time. In calculating their retirement savings need, the couple is assuming a 3% annual rate of inflation, an 8% aftertax return on investments, and a 25year retirement period. Using the level payment approach, how much will Allison and Nick need to save in an annual payment at the end of each year to fund their retirement need, without considering any Social Security benefit that may be available?

Reference no: EM131813635

Questions Cloud

What is the materials price and quantity variance : During March, 10,000 pounds of raw materials costing $1.55 per pound were used in making 4,800 wind chimes. What is the (1) materials price

Performing the relevant test of all such coins : Six coins of the same type are discovered at an archaeological site. If their weights on average are significantly different from 5.25 grams.

Will the value of the option increase or decrease : If the interest rate increases, will the value of the option increase or decrease.

What is the budgeted net income for february : Collections of sales are 50% in the month of sale and 50% the next month. What is the budgeted net income for February

Annual payment at end of each year to fund their retirement : Nick need to save in an annual payment at end of each year to fund their retirement need, without considering any Social Security benefit that may be available

Defining the normal distribution of household driving : An economist wishes to determine whether people are driving less than in the past. In one region of the country the number of miles driven per household.

When was the agglutination test conducted : What blood groups did ML Cowan discover when she tested the "crusted stains" of blood on Marilyn Sheppard's watch?

Test that actual mean daily intake for women is different : Assuming that daily iron intake in women is normally distributed, perform the test that the actual mean daily intake for all women is different from 18 mg/day.

Should be held at each time by a replicating portfolio : The number of shares of stock that should be held at each time by a replicating portfolio.

User Account

All Pages