Planning to save for retirement

Assignment Help Financial Management
Reference no: EM131065270

You are planning to save for retirement over the next 30 years. To save for retirement, you will invest $1,450 a month in a stock account in real dollars and $570 a month in a bond account in real dollars. The effective annual return of the stock account is expected to be 10 percent, and the bond account will earn 6 percent. When you retire, you will combine your money into an account with a 7 percent effective return. The inflation rate over this period is expected to be 3 percent. How much can you withdraw each month from your account in real terms assuming a 25-year withdrawal period?

Reference no: EM131065270

Questions Cloud

Calculate the monthly payment on mortgage : Consider a mortgage borrower who wants to buy a house at the price $280? 000. The bank offers the following mortgage: Mortgage A: required down payment: length of the mortgage: fixed mortgage rate: payment frequency: Calculate the monthly payment on ..
Why highly emotional performance of country blues singers : Why was the highly emotional performance of country blues singers so different than what white teenagers were used to?
Company to make an after-tax operating profit : Company produces one type of sunglasses with the following costs and revenues for the year: What quantity of units is required for PJ Company to make an after-tax operating profit of $1,200,000 for the year?
How come the united states can grow food : You have said that the hunger problem is not the result of overpopulation. But you have not yet answered the most basic and simple question of all: Why can't people feed themselves?
Planning to save for retirement : You are planning to save for retirement over the next 30 years. To save for retirement, you will invest $1,450 a month in a stock account in real dollars and $570 a month in a bond account in real dollars. How much can you withdraw each month from yo..
What does the life of this person teach us : Pick one Religious Figure: Jesus, Buddha, Muhammad, or Confucius. What does the life of this person teach us about what it means to be religious? Have the religious traditions around this person been faithful to his message?
Find the probability for exactly two messages arrive : A message arrive at a switch board in poisson distribution manner at an average rate of six per hour. Find the probability for exactly two messages arrive within one hour, no message arrive within one
Find the p-value for this test : Is there a strong evidence to indicate that the standard deviation of hole diameter exceeds 0.01 millimeters? Use? = 0.01. State any necessary assumptions about the underlying distribution of the data. Find the P-value for this test
Prepare a presentation on industry analysis : I need power point work for 10 slides with speaker notes. Work must be about Industry Analysis, I will submit it in files. Slides must just about "Industry Analysis" dont put introduction and Description of product

Reviews

Write a Review

Financial Management Questions & Answers

  What is a fair price per share

Benjamin Garcia's start-up business is succeeding, but he needs $209,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $836,000 and the angel has agreed to invest the $209,000 that is neede..

  What is an ipo how does an ipo allow an organization to

what is an ipo? how does an ipo allow an organization to grow financially? when is a merger or an acquisition instead

  Measure and manage performance against objectives

You are exploring the need for organisations to measure and manage performance against objectives, as well as the potential effectiveness of tools such as Balanced Scorecards and Strategy Maps

  Firms after-tax component cost of debt for purposes

A company's 8% coupon rate, semi annual payment, $1,000 par value bond that matures in 20 years sells at a price of $593.17. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calcula..

  What tools does the Fed use to execute monetary policy

Let’s discuss the actual tools of the Fed. What tools does the Fed use to execute monetary policy, and how do they work in practice? Of the monetary policy tools available to the Fed, which is preferred? Why?

  Dividends are expected to grow at rate

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent, and the company just paid a di..

  Detail the provisions of the sarbanes-oxley act

Investigate in detail the provisions of the Sarbanes-Oxley Act of 2002 (SOX) from the Internet, periodicals, or academic journals.  Select one of the provisions of the Act, briefly describe it, and indicate why you think (or do not think) financial s..

  Paying dividends-what is the current share price

Estes Park Corp. pays a constant $9.20 dividend on its stock. The company will maintain this dividend for the next 8 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share pri..

  Considering new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.58 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,040,000 in annual sale..

  What is its present value

Perpetuity of $4,500 per year beginning today is said to offer a 13% interest rate. What is its present value?

  What property must a good satisfy to be a pure public good

Which of the following is true when there is optimal provision of a public good? Which of the following factors is likely to prevent private market forces from providing the optimal amount of a public good? What property must a good satisfy to be a p..

  What is the total return to an investor who held the bond

An 8.7%, twenty-year bond yields 6.7%. If the yield remains unchanged, what will be its price one year hence? Assume annual coupon payments. What is the total return to an investor who held the bond over this year?

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