Reference no: EM13825930
Complete the following homework scenario:
Bob and Lisa are both married, working adults. They both plan for retirement and consider the $2,000 annual contribution a must.
First, consider Lisa’s savings. She began working at age 20 and began making an annual contribution of $2,000 at the first of the year beginning with her first year. She makes 13 contributions. She worked until she was 32 and then left full time work to have children and be a stay at home mom. She left her IRA invested and plans to begin drawing from her IRA when she is 65.
Bob started his IRA at age 32. The first 12 years of his working career, he used his discretionary income to buy a home, upgrade the family cars, take vacations, and pursue his golfing hobby. At age 32, he made his first $2,000 contribution to an IRA, and contributed $2,000 every year up until age 65, a total of 33 years / contributions. He plans to retire at age 65 and make withdrawals from his IRA.
Both IRA accounts grow at a 7% annual rate. Do not consider any tax effects.
Write a two to three (2-3) paragraph summary in which you:
Create a chart summarizing the details of the investment for both Bob and Lisa.
Explain the results in terms of time value of money.
|
Interest on the investment is compounded semi annually
: What would be the future value of $19,378 invested now if the money remains deposited for eight years, the annual interest rate is 18 percent, and interest on the investment is compounded semi annually? How would your answer for (a) change if quarter..
|
|
Define the project scope
: After you have the project scope management plan developed, define the project scope
|
|
Calculating the prices of the bonds
: Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below are the bonds he is considering adding to his portfolio. Before calculating the prices of the bonds, indicate whether each bond is trad..
|
|
Stock instead of paying a dividend
: "If a company repurchases stock instead of paying a dividend, the number of shares falls and earnings per share rise. Thus stock repurchase must always be preferred to paying dividends."
|
|
Explain the results in terms of time value of money
: First, consider Lisa’s savings. She began working at age 20 and began making an annual contribution of $2,000 at the first of the year beginning with her first year. Create a chart summarizing the details of the investment for both Bob and Lisa. Expl..
|
|
Discuss the key insights we can take from classical model
: The problem is belongs to Economics and it is discuss about the insights and shortcomings from Ricardian model. Ricardian model is best known for its representation of optimal usage of a country's resources.
|
|
New capital and its dividends vs retained earnings
: "Unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost."
|
|
Premature infant delivery and giving the baby naxalone
: Premature Infant Delivery and Giving the baby Naxalone for Apnoea
|
|
Operating cash inflows and terminal cash flows
: Originally purchased 3 years ago at an installed cost of $400,000, it is being depreciated under MACRS using a 5 year recovery period. The old press has a remaining economic lif of 5 years. Recommend which, if either, of the presses the firm should a..
|