How much must he save during each of the next 10 years

Assignment Help Finance Basics
Reference no: EM132484785

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, 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. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $55,000 saved, and he expects to earn 10% annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM132484785

Questions Cloud

Define the sample statistics of interest in this study : What is the probability that at least one of the six women will have received an influenza vaccine while pregnant and How many (of the six) women
What is the expected return on the market : Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market?
What is the length of the firm cash conversion cycle : Medwig Corporation has a DSO of 17 days. The company averages $3,500 in credit sales each day. What is the company's average accounts receivable?
What are some aspects that affect your thinking on matter : There are books on it, but what I would like for you to capture and transmit in the essay is how you believe an awareness of DIVERSITY affects the outcome.
How much must he save during each of the next 10 years : How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations.
What is the price per share without the new machines : What is the price per share without the new machines? What is the value of the growth opportunities that the machine venture brings?
How much must she deposit into an account every six : If she retires ten years from now and interest is 6.5% compounded semi-annually, how much must she deposit into an account every six months starting now?
How a social worker might utilize cultural strengths : Providing specific examples, explain how a social worker might utilize cultural strengths when working with clients. Describe 2-3 social work skills.
What kinds of firms use commercial paper : Is it true that most firms are able to obtain some free trade credit and that additional trade credit is often available, but at a cost? Explain.

Reviews

Write a Review

Finance Basics Questions & Answers

  Convertibility feature be exercised by a bondholder

In what type of economic circumstances would a call feature be beneficial to a firm? In what ways does it increase risk for the bondholder? When would a convertibility feature be exercised by a bondholder?

  Options to communicate within the workplace today

There are so many options to communicate within the workplace today. (Email, share point, Skype (IM), texting, Yammer, etc.)

  What will the company cash dividend be in seven years

Four years ago, Bling Diamond, Inc., paid a dividend of $2.25 per share. The company paid a dividend of $2.67 per share yesterday.

  When examining financial statements a note that describes

topic 1 contingencieswhen examining financial statements a note that describes contingencies should be reviewed closely

  As the rate of innovation increases companies face

as the rate of innovation increases companies face expanding productservice lines shorter product and service

  Loan period and no compensating balance requirement

An 18% rate of interest with interest paid at the end of the loan period and no compensating balance requirement

  A company expects an indefinite stream of future dividends

a company expects an indefinite stream of future dividends of 200000 and a required rate of return of 16 percent. there

  Management analyze the situation

How would these decisions affect one another? How could the leverage concept be used to help management analyze the situation?

  Compute the incremental income after taxes

Compute the incremental income after taxes that would result from these projections: Compute the incremental Return on Sales if these new credit customers are accepted:

  You want to retire in 22 years to fund the retirement you

you want to retire in 22 years. to fund the retirement you deposit 10000 into an account now and plan to save an equal

  Record acceptance of the note receivable

On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $10,000.

  Why was double stacking considered a major innovation

Railroads have the largest percentage of intercity freight ton-miles, but motor carriers have the largest revenue. How do you explain this relationship?

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