Supplement the retirement programs

Assignment Help Financial Accounting

Reference no: EM131261512

Stefani? German, a? 40-year-old woman, plans to retire at age? 65, and she wants to accumulate $ 500000 over the next 25 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 4 % by investing in a? low-risk portfolio containing about 20 %? short-term securities, 30 % common? stock, and 50 % bonds. Stefani currently has $ 52516 that at an annual rate of return of 4 % will grow to about $ 140000 by her 65th birthday? (the $ 140000 figure is found using time value of money? techniques, Chapter 4? Appendix.) Stefani consults a financial advisor to determine how much money she should should save each year to meet her retirement savings objective. The advisor tells Stefani that if she saves about $ 24.01each? year, she will accumulate? $1,000 by age 65. Saving five times that amount each? year, $120.05 allows Stefani to accumulate roughly? $5,000 by age 65.

a. How much additional money does Stefani need to accumulate over time to reach her goal of $ 500000?

b. How much must Stefani save to accumulate the sum calculated in part a. over the next 25 ?years?

Reference no: EM131261512

Questions Cloud

Tradition of keeping information about clients confidential : Swiss banks have had a long tradition of keeping information about their clients confidential. Is this the correct strategic focus to take in the 21st century? Should the United States government have the right to demand information pertaining to the..

What amount is recorded as common stock issued : A corporation issues 100,000 shares of an authorized 500,000 shares of $1 par value common stock.the selling price is $15 per share. How much cash is received? What amount is recorded as common stock issued? What amount if any is recorded as addition..

True for goods under the purview of article two of the ucc : Which of the following is true for goods under the purview of Article 2 of the UCC?

Raise selling price and reduce variable costs : Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $27 each, and her variable costs are $17 per basket. She incurs $12,600 i..

Supplement the retirement programs : Stefani? German, a? 40-year-old woman, plans to retire at age? 65, and she wants to accumulate $ 500000 over the next 25 years to supplement the retirement programs that are being funded by the federal government and her employer. How much additional..

Straight line depreciation to double declined balance : Could you please research and explain if a change from straight line depreciation to double declined balance requires a journal entry? If that is the case, provide the journal entry. Be specific in providing your explanation.

Compute Dows earnings per share for the year ended : On December 31, 2015, Dow Steel Corporation had 790,000 shares of common stock and 49,000 shares of 7%, noncumulative, nonconvertible preferred stock issued and outstanding. Compute Dow's earnings per share for the year ended December 31, 2016.

Warranties and loss contingencies : (Warranties and Loss Contingencies) The following two independent situations involve loss contingencies. Part 1: Benson Company sells two products, Grey and Yellow. Each carries a 1-year warranty. 1.Product Grey—Product warranty costs, based on past ..

No journal entry required in the first account field : Prepare the journal entry, if any, required to record each of the initial business activities on September 1. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Prepare the adjusting jour..

User Account

All Pages