How much should he invest each year

Assignment Help Other Subject

Reference no: EM133565790

Retirement Planning. A recent MBA would like your assist-ance in determining how much to save for retirement. He is planning to invest $3,000 in a tax-sheltered retirement fund at the end of each year (i.e., appreciation of the fund is not taxed). The rate of return each year can be modeled as a normally distributed random variable with a mean of 12 percent and a standard deviation of 2 percent.

a. If he is 30 years old now, how much money should he expect to have in his retirement fund at age 60?

b. What is the probability that he will have more than $1 million in his retirement fund when he reaches age 60?

c. How much should he invest each year if he wants the mean value of his portfolio to be at least $1 million at age 60?

d. How much should he invest each year if he wants there to be a 90 percent chance of having at least $1 million in his retirement fund at age 60?

Attachment:- RAGI-Project.rar

Reference no: EM133565790

Questions Cloud

What if any special considerations would you want to include : What if any special considerations would you want to include when treating clients with schizophrenia who have early-onset schizophrenia compared to adult

What types of activities would you plan for the residents : What types of activities would you plan for the residents? Describe why each activity was selected and why it should stimulate memory.

What negative environmental in?uences can you identify : what negative environmental in?uences can you identify within your immediate living and work environments? For example, is the air in your city/town heavily

Evaluate whom you would go to deal with different problems : Evaluate whom you would go to deal with different problems. Then, consider the types of support your network can provide. Reflect on this network and list

How much should he invest each year : How much should he invest each year if he wants there to be a 90 percent chance of having at least $1 million in his retirement fund at age 60

How do language games played with caregivers : how do language games played with caregivers during the first year help facilitate language development? Joint actions are routine activities that provide

What needs to be done in emergency situation : Individual preparedness is essential for everyone to be ready with what needs to be done in an emergency situation.

How can childhood abuse and neglect influence different : How can Childhood abuse and neglect influence different attachment styles in adulthoodsuch as secure, avoidant, anxious, or disorganized attachment?

Differences between licensure and certification : Explain the differences between licensure and certification. One argument used for allowing nurse practitioners more independent responsibility

User Account

All Pages