What amount would have to deposit

Assignment Help Financial Accounting
Reference no: EM132579348

This is a classic 'retirement' problem. A time line will help in solving it. Your friend is celebrating her 35th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $10 000 from her savings account on each birthday for 10 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in the local savings bank, which offers 7 per cent interest per year. She wants to make equal, annual payments on each birthday in a new savings account she will establish for her retirement fund.

Question 1: If she starts making these deposits on her 36th birthday and continues to make deposits until she is 65 (the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals on retirement?

Question 2: Suppose your friend has just inherited a large sum of money. Rather than making equal payments, she has decided to make one lump-sum payment on her 36th birthday to cover her retirement needs. What amount would she have to deposit?

Reference no: EM132579348

Questions Cloud

Common ethical issues IT professionals : What are some of the common ethical issues IT professionals and IT users face and What approaches can support the ethical practices of IT users?
What is the importance of photosynthesis to life on earth : The damage herbicides can cause if not used properly. describe one to two of the dangers of atrazine in particular.
What is the percent change between the two years : If assets in 2018 were equal to $5929.1 million dollars and $6431.7 million dollars in 2019, what is the percent change between the two years?
Why does this patient have low oxygen saturation : Why does this patient have low oxygen saturation? What is preventing him from having saturation in the normal range?
What amount would have to deposit : She has decided to make one lump-sum payment on her 36th birthday to cover her retirement needs. What amount would she have to deposit?
Draw the process of meiosis : Draw the process of Meiosis. Your parent cell is 2n=6 (n is the number of homologous chromosome pairs
Identify what kinds of cells they are : You find unfamiliar cells in the water. What are you going to look for to try to identify what kinds of cells they are?
Business tort of negligence : What must Fazio show to recover damages from Speedy Delivery? If you are the attorney for Speedy Delivery what would be your best defense argument
Sketch out a cross section of a cell membrane : Sketch out a cross section of a cell membrane showing a proposed transporter involved in either facilitated diffusion

Reviews

Write a Review

Financial Accounting Questions & Answers

  Finding present value of winnings

The Caldwell Herald newspaper reported the following story - Frank Ormsby of Caldwell is the states newest millionaire. By choosing the six winning numbers on last weeks state lottery

  Assuming the exchange has commercial substance

Morgan Trucking traded a used truck with a book value of $1,700 and a fair market value of $2,300 for a new truck with a list price of $17,800. Morgan agreed to pay $13,000 in cash for the exchange in addition to giving up the used truck. Assuming th..

  Compute the depreciation expense and rent revenue

Compute the depreciation expense, rent revenue, interest expense, insurance expense and supplies expense recognized during the first quarter

  Illustrate what is the amount of net income or net loss

After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns are $25,250 and $21,825, respectively. Illustrate what is the amount of net income or net loss for the..

  What mindy will recognize goodwill of

What Mindy will recognize goodwill of? Babel Corporation acquired all outstanding shares of Connor Ltd for $2.1 million. Selected information relating to Connor

  Illustrate what are the total interest they will be charged

"The Ortegas decide to buy some furniture priced at $400 with $40 down and the balance to paid for using 10% add-on interest, to be paid in monthly installments over one year. Illustrate what are the total interest they will be charged? and what is..

  How many shares of common stock are outstanding

How many shares of common stock are outstanding and assuming that all shares were sold at the same price, what was the original selling price per share?

  Income statements and the retained earnings statement

Purpose two income statements and the Retained Earnings Statement. Use the single-step format and multiple-step income formats and income statement in the period

  Purpose stockholders equity section of the balance sheet

Purpose the stockholders equity section of the balance sheet at December 31, 2009. Include a supporting schedule showing your computation of retained earnings at the balance sheet date.

  Calculate the contribution margin as a percent

Brandon's home health care agency is considering a new product with a fixed cost of $2,000, Calculate the contribution margin as a percent

  Find best estimate of the number of employment interviews

Based on the year-on-year increase over the last 5 years, the best estimate of the number of employment interviews to be carried out this year is

  Prepare the adjusting entries based on the reconciliation

Using the four steps in the reconciliation procedure, prepare a bank reconciliation at December 31. Prepare the adjusting entries based on the reconciliation.

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