What equal annual payment does hillary

Assignment Help Financial Management

Reference no: EM131937459

Hillary plans to retire in her 60s. In addition to MPF, she has a supplemental retirement investment plan. All funds invested in this plan will earn 5% annually. From this investment plan, Hillary hopes to make 25 annual withdrawals of $140,000, with the first withdrawal on her 66th birthday and the last on her 90th birthday.

a) What lump sum does Hillary need to invest on her 30th birthday to provide for the 25 withdrawals of $140,000 each?

b) What equal annual payment does Hillary need to invest in order to provide for the 25 withdrawals? The first payment will be on her 31st birthday, and the last will be on her 65th birthday.

Reference no: EM131937459

Questions Cloud

What do investors expect the stock to sell : A share of stock sells for $50 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.2.

In finance time value of money problems : In finance time value of money problems, a finite series of equal payments over equal periods is referred to as

Product description of the corporation : How to estimate the size of a market? I'm writing a paper on the creation a pet business; the service/product description of the corporation

What elements of the service package take place : If Galen's torque wrench measured a mean value of 61.4 foot-pounds in his re-assembly of the Camry engine, should Fred allow him to perform this work?

What equal annual payment does hillary : What equal annual payment does Hillary need to invest in order to provide for the 25 withdrawals?

Calculate the net advantage of leasing and recommended : Calculate the Net Advantage of Leasing and recommended if Agents should purchase or lease the MRI.

Calculate the one year holding period return : Suppose that the YTM next year falls to 7.5%. Calculate the one year holding period return for each of the bonds.

Risk-free rate of interest and market risk premium : The stocks beta is 1.7, the risk-free rate of interest is 2.5% and the market risk premium is 5.25%. Should you buy the stock?

Enter the annual equivalent worth of machine : Enter the annual equivalent worth of the machine that is the best alternative if the interest rate is 8.5%. If neither machine is acceptable, enter 0.

User Account

All Pages