Investment to make contributions to employer-s fund

Assignment Help Finance Basics

Reference no: EM1310321

1) John has newly accepted position with state agency which has retirement pension plan which needs joint contributions by employee and employer. John is now 10 years from retirement age of 65 and expects to add $400 per year to the plan, that will make him eligible for payments of= $1,000 per year for remainder of his life, starting at the age of sixty five. John's retirement plan is optional; hence, he is considering alternative to invest annually the amount equal to his $400 per year contribution. If John suppose his investments would earn 8% annually, and his life expectancy is 80 years, must he invest in his own plan or must he make contributions to his employer's fund?

Study both alternatives and create recommendation. Illustrate all computations and describe your reasons. Write any assumptions you make.
Demonstrate your work as a 2-page report in a Word document formatted in APA style.

Reference no: EM1310321

Questions Cloud

Analysing characteristics of derivative markets : Analyse characteristics of derivative markets, by focusing on credit default swaps (CDS).

What speed does water spray from the hose : A dish of hot food has an emissivity of 0.40 and emits 20 W of thermal radiation. If you wrap it in aluminium foil, which has an emissivity of 0.008, how much power would it radiate.

Case study of first chance casino : The First Chance Casino has a gambling facilities, bar, restaurant, and hotel. All employees are permited to obtain food from the restaurant at no charge throughtout working hours.

Find the asset turnover ratio for sunside : Evaluate the asset turnover ratio for Sunside Villas for 2007 and evaluate the average age of Sunside Villas' property, plant, and equipment.

Investment to make contributions to employer-s fund : If John suppose his investments would earn 8% annually, and his life expectancy is 80 years, must he invest in his own plan or must he make contributions to his employer's fund?

What is an acceleration due to gravity on rams : Consider the four masses. Find the total gravitational potential energy of this system. How does your answer to part A change if all the masses in the system are doubled.

What is the most assembly division would be willing to pay : The Assembly Division of the same company needs a part that is just like Product A. The Assembly Division can choose whether to buy Product A from an outside supplier for $14.15 or buy it internally from the Parts Division. and evaluate the most ..

To what maximum angle, measured from vertical : A 75 g, 31 cm long rod hangs vertically on a frictionless, horizontal axle passing through its center. A 12 g ball of clay travelling horizontally at 2.1 m/s hits and sticks to a very bottom tip of the rod.

Tax consequences of incorporation : Write down a memo to Stacey describing the tax consequences of incorporation. As part of your memo analyze the possibility of having the corporation issue common and preferred stock and debt for shareholders’ property and money.

User Account

All Pages