Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Funding a retirement goal Connor Ward wishes to have $1,000,000 in a retirement fund 30 years from now. He can create the retirement fund by

image text in transcribed

Funding a retirement goal Connor Ward wishes to have $1,000,000 in a retirement fund 30 years from now. He can create the retirement fund by making a single lump-sum deposit today. Use next table to solve the following problems. a. If he can earn 9 percent on his investments, how much must Connor deposit today to create the retirement fund? Round PV-factor to three decimal places. Round your answer to the nearest cent. Calculate your answer based on the PV-factor $ $ $ If he can earn only 7 percent on his investments? Round PV-factor to three decimal places. Round your answer to the nearest cent. Calculate your answer based on the PV-factor. Calculate your answer based on the financial calculator. $ Calculate your answer based on the financial calculator. b. If, upon retirement in 30 years, Connor plans to invest the $1,000,000 in a fund that earns 7 percent, what is the maximum annual withdrawal he can make over the following 20 years? Round the answer to the nearest cent. Round PVA-factor to three decimal places. Calculate your answer based on the PVA-factor. $ Calculate your answer based on the financial calculator. S c. How much would Connor need to have on deposit at retirement to annually withdraw $30,000 over the 20 years if the retirement fund earns 7 percent? Round the answer to the nearest cent. Round PVA-factor to three decimal places. Calculate your answer based on the PVA-factor. $ Calculate your answer based on the financial calculator. $ d. To achieve his annual withdrawal goal of $30,000 calculated in part e, how much more than the amount calculated in part a must Connor deposit today in an investment earning 7 percent annual interest? Assume that Connor starts withdrawing funds only after his retirement. Round PVA-factor to three decimal places. Round your answer to the nearest cent. If an amount is zero, enter "0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions