What annual interest rate must they earn to reach their goal

Assignment Help Financial Management
Reference no: EM131447382

Your parents will retire in 16 years. They currently have $330,000 saved, and they think they will need $1,550,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.

Reference no: EM131447382

Questions Cloud

The balance of this account after the initial investment : Your grandfather made an investment of $4,000 the day you were born, as such starting to earn returns immediately. His assumption is that by investing in the average market, the investment account will earn an annual rate of 6%, which is a historical..
Respectively short-term and long-term interest rates : Suppose the U.S. Treasury issues a large quantity of long-term 10-year Treasury bonds, under the market segmentation theory, what would be the effect of this issue on respectively short-term and long-term interest rates?
What is the annual equivalent cost : The initial cost of a pickup truck is $12837 and will have a salvage value of $3810 after five years. Maintenance is estimated to be a uniform gradient amount of $129 per year, with zero dollar for first year maintenance. The operation cost is estima..
Offered the opportunity to purchase a vehicle : You have been offered the opportunity to purchase a vehicle where you borrow $24,000 at an annual interest rate of 5% for a term of five years. What would be the payment if you choose to elect to have a weekly plan?
What annual interest rate must they earn to reach their goal : Your parents will retire in 16 years. They currently have $330,000 saved, and they think they will need $1,550,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?
Cash balance on conner bank statement : The Conner Company's August 31, 2016 cash balance on its books was $90,000. As of August 31, outstanding checks total $44,000 and deposits in transit total $30,000. What was the August 31, 2016 cash balance on Conner's bank statement?
Which investment would have lower dollar market value : Which investment would have a lower dollar market value (price)?  A Treasury Bond Maturing in December 2020 with a coupon of 7%?
Par value corporate bond and par value municipal bond : You are trying to decide between a par value corporate bond carrying a coupon rate of 6.25% per year and a par value municipal bond that pays an annual coupon rate of 4.75%. Assuming you are in 28% tax bracket which should you chose?
Accumulates at an annual effective rate of interest : In fund C, $100,000 accumulates at an annual effective rate of interest j in year one and an annual effective rate of interest k in year 2. What is the balance in fund C at the end of year 2?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the depreciation expense in year

A project requires $410,808 of equipment that is classified as 7-year property. What is the depreciation expense in year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4...

  The underlying asset of the two european options

Given that exercise price is $75, call option premium is $3.5, put option premium is $1, both options have a time to maturity of 32 days, and the risk-free rate is 5% p.a., please show how you could create a "synthetic stock" that could serve as the ..

  What is the firms average accounts receivable balance

What is the firm's average accounts receivable balance?- If the variable cost of each product is 65 percent of sales, what is the average investment in accounts receivable?

  Money market account with an annual return

You plan to deposit $1,500 per year for 6 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 6 years? Round your answer to the near..

  Value a constant growth stock financial analysts

Value a Constant Growth Stock Financial analysts forecast Wal-Mart Stores (WMT) growth for the future to be 12.00 percent. Their recent dividend was $1.73. What is the value of their stock when the required rate of return is 15.00 percent?

  What is project internal rate of return

Project ZZQ requires an initial outlay of $500,000 and has a profitability index of 1.4. The project is expected to generate equal annual cash flows over the next ten years. The required return for this project is 16%. What is project ZZQ's internal ..

  Calculate return on equity using the du point identity

Calculate the following profitability ratios using the financial statements you looked up: Profit margin, Return on Assets, and Return on equity. Calculate the following Turnover ratios using the financial statements you looked up: Inventory Turnover..

  What is the expected price of the stock at the end of year

SAS Co. will be paying a dividend of $.80 at the end of this year that will grow by 4% per year for the next 5 years. After the 5 year period the dividend is expected to grow 3% for the foreseeable future. What is the value of the stock today (r= 9%)..

  Construction of plant to manufacture energy saving device

ELC Electrical Services is considering the construction of a plant to manufacture a new energy saving device for small offices. The company recently commissioned a $100,000, two-year study to assess the market demand for the proposed product. Using t..

  What would be weight used for equity in computation

Town Crier has 6.5 million shares of common stock outstanding, 3.5 million shares of preferred stock outstanding, and 25.00 thousand bonds. If the common shares are selling for $29.60 per share, the preferred share are selling for $17.00 per share, a..

  Insured under commercial general liability policy

Lastovica Construction is insured under a commercial general liability (CGL) policy. The firm agreed to build a new manufacturing facility for the Jones Corporation. A heavy machine used by Lastovica Construction accidentally fell from the roof of a ..

  Inflations impact on price of an asset

Inflation’s impact on price of an asset. Tyler is working on his pilot’s license and dreams of one day owning his own personal aircraft. Tyler is putting away $1,250 per month in an account earning 9.25% annually. The plane he would like to buy curre..

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