Reference no: EM133073717
Today is John Tardy's 45th birthday and, despite his finance professor's advice, he hasn't started to save for retirement. John can't believe time has passed so quickly. John wants to retire on his 65th birthday; mortality tables indicate his life expectancy is 85. Therefore, he will need a retirement fund that will sustain him for 20 years, or 240 months. John intends to completely deplete this fund by age 85, leaving nothing for his heirs.
a) What amount of money must be in the retirement fund on John's 65th birthday if he will withdraw $6,500 then and every subsequent month? John will withdraw the last payment one month before his 85th birthday for a total of 240 payments. The rate of return on the retirement fund during this period is 8% per year..
b) How much money must John save each month - beginning one month from today, his 45th birthday - to accumulate the necessary funds? The rate of return during this period is 9.8% per year.
c) John would like to start saving right now, of course, but his 18-year old daughter is about to start college at an exclusive eastern school and he hasn't saved for her tuition either. Suppose John can pay his daughter's expenses out of his current income but can't start saving for his retirement until she graduates (she is almost certain to take four years to finish). How much money must John save each month, beginning one month after his 49th birthday to accumulate the necessary funds.
|
Knowledge of corporate social responsibility
: Based on your knowledge of corporate social responsibility, as well as supply chain logistics, what is the best course of action in this situation? Discuss.
|
|
What is the current stock price for culver
: What is the current stock price for Culver? (Round intermediate calculations to 4 decimal places, e.g. 45.1771 and final answer to 2 decimal places, e.g. 45.17.
|
|
Calculate cost of debt
: Following information is available about Riana company:
|
|
Small Group Literacy Skills Lesson Plan
: What criteria does the mentor teacher use to assess the students' literacy skill development and abilities?
|
|
Find rate of return on the retirement fund
: Today is John Tardy's 45th birthday and, despite his finance professor's advice, he hasn't started to save for retirement. John can't believe time has passed so
|
|
What is the price of bond today
: Bond A is a premium bond making semiannual payments. The bond pays 8 percent coupon, has a yield to maturity (YTM) of 6 percent and has 14 years to maturity. Bo
|
|
Discuss experience animating text
: What types of animations do you use in a presentation? Do animations add a visual punch to your presentation or distract your audience?
|
|
What is the effective annual interest rate
: Car loans in some countries are priced on a fixed rate basis. For example, the prevailing 3-year car loan is 325%. What this rate means is that for a $10,000 lo
|
|
How much money did the firm borrow
: Using a nominal rate of 4.8%, compounded semiannually, to discount the cash flows, how much money did the firm borrow?
|