Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Now it's time for you to practice what you've learned. Suppose that Kate is 4 5 years old and has no retirement savings. She wants

Now it's time for you to practice what you've learned.
Suppose that Kate is 45 years old and has no retirement savings. She wants to begin saving for retirement, with the first payment coming one year from now. She can save $12,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 15.00% return. Assume that this rate will be constant for the rest of her's life.
Kate would like to calculate how much money she will have at age 60.
Using a financial calculator yields a future value of this ordinary annuity to be approximately $570,964.93grad at age 60.
Kate would now like to calculate how much money she will have at age 65.
Using a financial calculator yields a future value of this ordinary annuity to be approximately at age 65.
Kate expects to live for another 30 years if she retires at age 60, with the same expected percent return on investments in the stock market.
Using a financial calculator, you can calculate that Kate can withdraw $86,958.07? at the end of each year after retirement (assuming retirement at age 60), assuming a fixed withdrawal each year and $0 remaining at the end of her life.
Kate expects to live for another 25 years if she retires at age 65, with the same expected percent return on investments in the stock market.
Using a financial calculator, you can calculate that Kate can withdraw at the end of each year after retirement at age 65, assuming a fixed withdrawal each year and $0 remaining at the end of her life.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

Principles Of Commercial Real Estate Finance

Authors: Gail Ramshaw, Mortgage Bank

1st Edition

0793157099, 9780793157099

More Books

Students also viewed these Finance questions

Question

Whats My Comfort with Change?

Answered: 1 week ago