Calculate desired retirement income

Assignment Help Business Economics
Reference no: EM131197787

John Adams is the CEO of a nursing home in San Jose. He is now 50 years old and plans to retire in ten years. He expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today ( he realizes that the real value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, ten years from today, and he will then get 24 additional annual payments. Inflation is expected to be 5 % per year for 10 years (ignore inflation after John retires). he currently has $100,000 saved up and he expects to earn a return on his savings of 8% per year, annual compounding. to the nearest dollar, how much must he save during each of the next 10 years ( with deposits being made at the end of each year) to meet his retirement goal? (Hint: the inflation rate 5% per year is used only to calculate desired retirement income)

Reference no: EM131197787

Questions Cloud

Discuss three characteristics of your vision of a scientist : When you hear the word "scientist" what do you envision? - Which famous people or characters from the media come into your mind?
Compute speed of the car at this point : The car C increases its speed at the constant rate of 1.5 m/s2 as it rounds the curve shown. If the magnitude of the total acceleration of the car is 2.5 m/s2 at point A, where radius of curvature is 200 m, compute speed of the car at this point
Strategic importance within todays business environment : Write a report Why the concept of supply chain management is increasing in strategic importance within todays business environment, including the 'key drivers' behind why more & more attention is being focused on supply chain management & the bene..
Example of a service breakdown : Give an example of a service breakdown you experienced. Describe the incident. Explain the recovery method of the company. Are you still a customer of the company? Why or why not?
Calculate desired retirement income : John Adams is the CEO of a nursing home in San Jose. He is now 50 years old and plans to retire in ten years. He expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same purchasing p..
Limited offer or a regular thing : Many online merchants make a familiar offer - free shipping, either as a limited offer or a regular thing, and free returns. How effective is that offer, in attracting your business? Before answering, reflect upon the fact that nothing's really fr..
Review the relevant criterion in the capstone project : Review the relevant criterion in the Capstone Project and Presentation Scoring Guide to familiarize yourself with the specific expectations for demonstrating the outcome.
Find the resulting stresses at the top and bottom surfaces : find the resulting stresses at the top and bottom surfaces and at every abrupt change in cross section.
Determining the public transportation : Many American municipalities, over the years, have tried hard to get residents out of their cars and into public transportation. The results have been mixed, at best. Do you use public transportation?

Reviews

Write a Review

Business Economics Questions & Answers

  What is the purpose of the feds structure

When banks borrow directly from the Fed, the interest rate on those loans is the. An increase in money growth will cause inflation to increase in. What is the purpose of the Fed's structure?

  Typically the government-nominal rate of interest

If inflation falls from 5% to 3% to 1.3% it is sometimes called. Typically the government:  If the nominal rate of interest is 8 percent and the inflation rate is 3 percent, then the real rate of interest is: The unemployment rate is the percent of t..

  Firms are earning positive economic profits

Suppose independent truckers operate in a perfectly competitive industry. If these firms are earning positive economic profits, what happens in the long run to the following: The price of trucking services, The industry quantity of output, and The pr..

  What are some of barriers faced by particular population

There are countless people in need of our services in America today, including the disabled, those with mental health challenges, those living in poverty, the homeless, and victims of violence and domestic abuse, just to name a few. See the list on p..

  What happens to the mrs

what is the marginal utility of X? If a consumer moves downward along an indifference curve, what happens to the marginal utilities of X and Y? What happens to the MRS?

  Demand-marginal utility-elasticity and price controls

What owuld be the best expression in graphical form to express any of the one in parenthesis (possible graphs supply and demand, marginal utility, elasticity, price controls or any other graphical analyses. Events ar Price controls (minimum wage, far..

  Make a donation to his sister for building a new store

A successful man make a donation to his Sister for building a new store and upgrading shops, as well as for establishing a store fund. The donation is planned to be spent as follows: $200,000 each year for the first three years, $250,000 each year fo..

  The federal reserves target rate for the federal funds rate

The Federal Reserve’s target rate for the federal funds rate

  Would the firm gain or lose money by raising the price

Consider a good, called an ynoxinul, with a price elasticity of demand of -4. Suppose that there is a monopoly which controls the sale of ynoxinuls. Would the firm gain or lose money by raising the price? Suppose that the government want to tax ynoxi..

  Law of demand

Do these public goods conform to the law of demand. For which public supplies is demand price elastic.

  Unemployment insurance program

Do you think the unemployment insurance program in the USA should be made more generous (like some European countries), or less generous? Why or why not?

  Calculate ratio of steady-state levels of income per capita

Two countries, X and Y, satisfy the Solow model with α = 1/3 and productivity A=1. In Country X, investment is 54% of GDP and the population grows at 1% per year. In Country Y, investment is 8% of GDP, and the population grows at 3% per year. In both..

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