What will the nominal value of your first withdrawal be

Assignment Help Financial Management

Reference no: EM132025634

You would like to retire in 45 years. You expect that you will need $80,000 of today’s purchasing power every year during retirement, with the first withdrawal coming in exactly 45 years. You expect to make 30 annual withdrawals from your retirement account. Annual inflation is expected to be 2%, and you can invest your funds at a 9% nominal interest rate.

(a) What will the nominal value of your first withdrawal be?

(b) How much will you need in your retirement account one year prior to your first withdrawal?

(d) What constant retirement contribution would you need to make for the next 44 years to obtain your retirement goals?

Reference no: EM132025634

Questions Cloud

Hr manager of a financial services organisation : You need to ensure your employees know about the types of ethical behaviour which are required whilst they are working for your organisation.

Difference between independent and mutually exclusive : Explain the difference between independent, mutually exclusive, and contingent investment projects.

Steps to involve the hr department : It is intended that the flow chart will be placed on employee noticeboards and contained in policy and procedure manuals. The flow chart should include steps.

What you think about what is normal or abnormal : Culture clearly has strong effects on mental disorders. How does this influence what you think about what is normal or abnormal?

What will the nominal value of your first withdrawal be : What will the nominal value of your first withdrawal be? What lump-sum payment would you need to make today in order to endow your retirement?

Should the manager use the imperfect information or not : Should the manager use the imperfect information or not? What can a manager do to increase the usefulness of imperfect information? List an example.

Describe the role of seniors in the chosen minority groups : Describe the role of seniors in the chosen minority groups. Explain the changes in the role of seniors over the years.

What is the cost of endowing the scholarship today : What is the nominal effective annual rate (EAR) at which you can invest? What is the cost of endowing the scholarship today?

What cues can educators take from the tragic cases : What does "Genie's" final outcome tell us about language (and emotional) development? What cues can educators take from these tragic cases?

User Account

All Pages