Question
need help on all of these You are trying to decide how much to save for retirement. Assume you plan to save $ 6 comma
need help on all of these
You are trying to decide how much to save for retirement. Assume you plan to save $ 6 comma 500
$6,500 per year with the first investment made one year from now. You think you can earn 5.5
5.5% per year on your investments and you plan to retire in37
37 years, immediately after making your last $ 6 comma 500
$6,500 investment.
a. How much will you have in your retirement account on the day youretire?
b.If, instead of investing $ 6 comma 500
$6,500 peryear, you wanted to make onelump-sum investment today for your retirement that will result in the same retirementsaving, how much would that lump sum need tobe?
c. If you hope to live for 18
18 years inretirement, how much can you withdraw every year in retirement(starting one year afterretirement) so that you will just exhaust your savings with the 18
18th withdrawal(assume your savings will continue to earn 5.5
5.5% inretirement)?
d.If, instead, you decide to withdraw $ 148 comma 000
$148,000 per year in retirement(again with the first withdrawal one year afterretiring), how many years will it take until you exhaust yoursavings? (Usetrial-and-error, a financialcalculator: solve for"N", orExcel: functionNPER)
e. Assuming the most you can afford to save is $ 1 comma 300
$1,300 peryear, but you want to retire with $ 1 comma 000 comma 000
$1,000,000 in your investmentaccount, how high of a return do you need to earn on yourinvestments? (Usetrial-and-error, a financialcalculator: solve for the interestrate, orExcel: functionRATE)
a. How much will you have in your retirement account on the day youretire?
The amount in the retirement account in 37
37 years would be $
nothing
. (Round to the nearestcent.)
b.If, instead of investing $ 6 comma 500
$6,500 peryear, you wanted to make onelump-sum investment today for your retirement that will result in the same retirementsaving, how much would that lump sum need tobe?
You will need to make one lump sum investment today of $
nothing
. (Round to the nearestcent.)
c. If you hope to live for 18
18 years inretirement, how much can you withdraw every year in retirement(starting one year afterretirement) so that you will just exhaust your savings with the 18
18th withdrawal(assume your savings will continue to earn 5.5
5.5% inretirement)?
The amount you can withdraw every year in retirement is $
nothing
. (Round to the nearestcent.)
d.If, instead, you decide to withdraw $ 148 comma 000
$148,000 per year in retirement(again with the first withdrawal one year afterretiring), how many years will it take until you exhaust yoursavings? (Usetrial-and-error, a financialcalculator: solve for"N", orExcel: functionNPER)
You will exhaust your savings in
nothing
years.(Round to two decimalplaces.)
e. Assuming the most you can afford to save is $ 1 comma 300
$1,300 peryear, but you want to retire with $ 1 comma 000 comma 000
$1,000,000 in your investmentaccount, how high of a return do you need to earn on yourinvestments? (Usetrial-and-error, a financialcalculator: solve for the interestrate, orExcel: functionRATE)
You will need a return of
nothing
%. (Round to two decimalplaces.)
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