What constant amount could spend each year during retirement

Assignment Help Managerial Accounting

Reference no: EM132692184

You are saving for your retirement. Today (t=0), you are 30 years old. you plan to work and save for retirement for the next 35 years (t=1 thought t=35), retiring at age 65. The nominal interest rate is (and always will be) 5%.. Need detailed explanation about below questions with excel sheet formula.

Question a. Suppose at retirement (t=35), you have $2 million in the bank. What constant amount could you spend each year during retirement if your retirement lasts for 25 years (t=36 through t=60)?

Question b. Suppose that today (t=0), you have no retirement savings. What constant amount would you need to save each year during your working life (t=1 through t=35) to have $2 million in your account when you retire (t=35)?

Question c. Suppose that today (t=0), you have no retirement savings. Next year (t=1), you plan to save $20, 000. In each subsequent year (t=2 through t=35), you plan to save 6% more than you saved in the previous year. How much will you save at t-6? Note, I am asking what contribution to your savings account you will make at t=6 and not how much savings you will have at t=6

Question d. Suppose you follow the savings plan described in part (c). How much will you have in the bank immediately after making your last deposit (t=35)?

Reference no: EM132692184

Questions Cloud

Calculate the amount of goodwill initially recognized : Calculate the amount of goodwill initially recognized as a result of the acquisition, and its allocation to the controlling and noncontrolling interests

Explain difference between the two-tier and n-tier : In terms of client-server architectures, can you explain the difference between the two-tier, three-tier, and n-tier? Visit a commercial Web site.

What is the eoq for the store : Discuss why traditional overhead allocation methods (i.e., plant-wide and departmental) distort product costs compared to ABC costing.

What is a financial market : 1. What is a financial market? What is the role of a financial market?

What constant amount could spend each year during retirement : Suppose at retirement (t=35), you have $2 million in the bank. What constant amount could you spend each year during retirement

Experiencing with poor scope management : How would you begin redesigning Dotcom.com's project management processes to minimize the problems they are experiencing with poor scope management?

Describe the components across the entire project : Kirk (2019) states composition is reviewing every visual property of the design. The final layer of design thinking concerned composition: how to position.

What are the project costs of capital for new ventures : The Treasury bill rate is 4% and the market risk premium is 8%.

Please describe npv-irr and relationship : Please describe NPV, IRR and their relationship. How do you evaluate each for making an investment decision?

User Account

All Pages