User Account

All Pages

How much must Tommy have when he is ready to retire

Assignment Help Financial Accounting
Reference no: EM132875969

Question - Tommy is celebrating his 30th birthday today and wants to start saving for his anticipated retirement at age 60. He wants to be able to withdraw $120,000 from his retirement account on each birthday for 20 years following his retirement; the first withdrawal will be on his 61st birthday. To achieve this goal, Tommy plans to make equal annual deposits on each birthday into his retirement account; the first deposit will be on his 31st birthday. Tommy intends to invest his money in a bank, which offers 6 percent interest per year.

Required -

a. How much must Tommy have when he is ready to retire?

b. How much must Tommy deposit annually to be able to make desired withdrawals at retirement?

c. Suppose Tommy currently has $50,000 in a mutual fund, which will return 10 percent per year. He plans to transfer all his investment from his mutual fund account to his retirement account on his 50th birthday. How much must Tommy deposit annually to be able to make desired withdrawals at retirement?

d. Without doing any calculation, explain how the changes in retirement age and investment return may affect the annual deposit needed.

Reference no: EM132875969

Questions Cloud

How much is the balance of Investment in Associate : The investee reported net income of $1,000,000 for the current year. How much is the balance of Investment in Associate at the end of the current year
Determine the supply of labour in an economy : 1. Outline four factors that determine the supply of labour in an economy
Describe the cultural event in which participated : Describe the cultural event in which you participated. Explain how this experience influenced your perceptions of diversity and difference.
Nature of collaborative relationship : -What are some collaborative nature of the relationship between the company and the union in four areas such as (1) mutual goals, (2) communication practices, (
How much must Tommy have when he is ready to retire : How much must Tommy have when he is ready to retire? How much must Tommy deposit annually to be able to make desired withdrawals at retirement
Summarize development of business ethics : Summarize the development of business ethics over the past several decades, including the rise of social issues in business.
Societal trends influence practice of management : How do societal trends influence the practice of management? What are the implications for someone studying management?
How might support veronica and other human trafficking : How might support Veronica and other human trafficking victims incorporating the information you have found. Explain how you can begin to increase
How much gross profit is to be recognized : The following data relates to a construction job started by Esther Inc; Total contract price - 1,000,000. How much gross profit is to be recognized

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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