How much will he have to save each month

Assignment Help Finance Basics

Reference no: EM13265206

Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $32,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $420,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $1,350,000 to his nephew Frodo. He can afford to save $4,100 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

Reference no: EM13265206

Questions Cloud

Find the change in entropy of reservoir and universe : The change in specific enthalpy during the melting of ice at 0 degrees C and 1.01 X 10^5 Pa is ?h= 333.39 kj/kg. find the change in entropy of reservoir and universe

International compensation : International Compensation

How accurate is the estimate : A six-year bond with a continuosly compounded yield of 4% provides a 5% coupon at the end of each year. Use duration and convexity to estimate the effect of a 1% increase in the yield on the price of the bond. How accurate is the estimate?

Find what is the quality factor q of the coil : purchase an inductor coil for a resonance circuit resonating at 1500 kHz; the operating bandwidth is 10 kHz. What is the quality factor Q of the coil

How much will he have to save each month : He can afford to save $4,100 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

Obtain fraction of its kinetic energy is rotational : An 8.70-cm-diameter, 340g solid sphere is released from rest at the top of a 1.50-m-long, 18.0 degree incline. What fraction of its kinetic energy is rotational

Calculate mad, mapd and mse : Compare the five forecasts by using MAD, MAPD and MSE and indicate which seems to be more accurate.

Determine the total energy lost to friction : A 3.3-m-diameter merry-go-round with rotational inertia 100kg?m2 is spinning freely at 0.60rev/s. Determine the total energy lost to friction

What is the maximum number of barrels of cranberries : What is the maximum number of barrels of cranberries that are waiting onthe trucks at any given time?

User Account

All Pages