User Account

All Pages

Determining the identical annual withdrawals

Assignment Help Finance Basics
Reference no: EM132813991

You have exactly 30 years until retirement. You will be making monthly deposits into your retirement account that is expected to earn 0.80% per month. The first deposit equal to $1,000 will be made one month from today, the last deposit will be exactly 30 years from now (the day you retire). Every month, your next deposit will grow by 0.2% compared to the one from the previous month. How much money will you have in your retirement account on the day you retire?

Assume, instead, that you will invest your retirement money in the form a one-time payment of $110,000 invested today into the account that has expected APR of 10.8% and semi-annual compounding. How much money will you have in your retirement account on the day you retire in 30 years?

Between accounts described in (A) (expected to earn 0.80% per month) and in (B) (having expected APR of 10.8% and semi-annual compounding) - which one would you choose if you wanted to invest in the account that is likely more risky? Why?

On the day of your retirement (exactly 30 years from today), you plan to transfer the value of your retirement account (computed in part (A)) into a safe account that combines both stocks and bonds and has an expected return of either 4.5% or 9.5% per year (only one of those numbers makes sense, and you have to pick which one). You will make the first annual withdrawal ($C) from that account exactly one year after you retire, and you will be making identical ($C) subsequent annual withdrawals for a total of 25 years (so the last withdrawal will be 25 years after you retire). After 25 years, you expect to have no money in the account. What will be the value of your identical annual withdrawals, $C?

Reference no: EM132813991

Questions Cloud

Explaining the most salient ethical and legal issues : Briefly identify the topic you selected. Then, summarize the articles you selected, explaining the most salient ethical and legal issues related to the topic.
What is the payback period for project : What is the payback period for this project? Their acceptance period is five years. Round to two decimal places.
How much is the target cost per unit : Products on the market suggests a price of $121.00 per unit. The company requires a profit of 0.23 of selling price. How much is the target cost per unit?
Should y be sold at the split-off point or processed further : The sales value of 4 000 litres of Z is $11 000, and the additional processing cost is $6 700. Should Y be sold at the split-off point or processed further
Determining the identical annual withdrawals : You have exactly 30 years until retirement. You will be making monthly deposits into your retirement account that is expected to earn 0.80% per month.
Which would auditor most likely assess control risk as high : Which would an auditor most likely assess control risk as high? Payroll supervisor authorizing increases to the hourly rate for all employees
What is the project irr and mirr : Students will use projected uneven cash flows to compute the net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), an
Describe components of gordons functional health patterns : Compare and contrast the growth and developmental patterns of two toddlers of different ages using Gordon's functional health patterns. Describe and apply.
What the results from discontinued operations reported : Crane Inc, Assuming Crane has a tax rate of 20%, the results from discontinued operations reported on Crane's income statement is

Reviews

Write a Review

Finance Basics Questions & Answers

  Develop a table in excel that can be used to track the value

You will be developing a simple portfolio that will be used for analysis over the following five weeks. You are given $10,000 to allocate to a portfolio. You must allocate 100% of your portfolio to the following securities: One hundred shares of a pu..

  Select beneficial option for client

Company A currently purchase CDs from many Vendors at various rates per pack. They do not have guaranteed orders with any vendors, and are planning to make consolidated order and reduce overall price.

  What is a branded community

What is a branded community? If you are a member or one or more branded communities

  Percent rate of return on similar investments

Grand Adventure properties offers a 9.5 percent coupon bond with annual payments. The yield to maturity is 11.2 percent

  Identify personal financial goal as start for financial plan

Identify personal financial goals as a start for a personal financial plan (short-term, intermediate-term, long-term, opportunity cost). Identify inflows of cash (use spending diary). Identify outflows of cash (use spending diary).

  Apply this transformation to the translation scheme

Consider translation during parsing as in Exercise 5.23. S. C. Johnson suggests the following method for simulating a separate stack for inherited attributes, using markers and a global variable for each inherited attribute.

  How should the media frame responsibility for obesity

Why would newspapers and television news cite socioeconomic factors the least as the cause of obesity? Is this a failure to tell the truth?

  Suppose the following two mutually exclusive investment

project a involves an investment of 1 million and project b involves an investment of 2 million. both projects have a

  What is b debt ratio

Company B has the same sales, assets, and net income, but its ROE is 30 percent. What is B's debt ratio? (Hint: Begin by looking at the Du Pont equation.)

  Balance in jim moore account

At the start of the fourth year, jim deposits an additional $50,000 that is also compounded semiannually at 12%. At the end of six years, the balance in jim moore's account is (use the tables in the handbook)

  Cultures are undergoing modification

More than goods and services are moving across borders: as technology enables ideas and lifestyles to be observed by a variety of people around

  When treasury stock is purchased with cash what is the

when treasury stock is purchased with cash what is the impact on the balance sheet equation?a. no change the reduction

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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