Save money to meet three objectives

Assignment Help Financial Management

Reference no: EM131829160

Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with a retirement income of $34,000 per month for 20 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 20 years of withdrawals, he would like to leave an inheritance of $750,000 to his nephew Frodo. He can afford to save $4,100 per month for the next 10 years. If he can earn an EAR of 10 percent before he retires and an EAR of 7 percent after he retires, how much will he have to save each month in Years 11 through 30? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131829160

Questions Cloud

How is unemployment measured and reported : How is unemployment measured and reported? What economic policies should be used to deal with these types of unemployment?

Learning and growth continue after you graduate : Question: What can you do to ensure that your learning and growth continue after you graduate?

How important is it to connect team members to the work : How important is it to connect team members to the work and/or output of the organization? That is, let's say you are a PM at Apple.

Discuss the role of government in a market economy : Explain the difference between government failure and market failure. Discuss the role of government in a market economy to address market failure.

Save money to meet three objectives : Bilbo Baggins wants to save money to meet three objectives. how much will he have to save each month in Years 11 through 30?

Construct a resource allocation matrix for the labor : Construct a Resource Allocation Matrix for the labor, equipment and material allocated to your assigned rocket project.

Knowledge of the preferred course sequence change : How does knowledge of the preferred course sequence change how you might schedule or approach your classes?

Why is following the preferred course sequence important : Why is following the preferred course sequence important? What are some possible risks of taking courses out of sequence?

What is the net international investment position : If Assets were 100 Billion$, and liabilities are 110 Billion$, what will be the net investment income? What is the net international investment position?

User Account

All Pages