Question
QUESTION 1 Pat has nothing in his retirement account. However, he plans to save $8,700.00 per year in his retirement account for each of the
QUESTION 1
-
Pat has nothing in his retirement account. However, he plans to save $8,700.00 per year in his retirement account for each of the next 12 years. His first contribution to his retirement account is expected in 1 year. Pat expects to earn 7.70 percent per year in his retirement account. Pat plans to retire in 12 years, immediately after making his last $8,700.00 contribution to his retirement account. In retirement, Pat plans to withdraw $60,000.00 per year for as long as he can. How many payments of $60,000.00 can Pat expect to receive in retirement if he receives annual payments of $60,000.00 in retirement and his first retirement payment is received exactly 1 year after he retires?
4.15 (plus or minus 0.2 payments)
2.90 (plus or minus 0.2 payments)
3.15 (plus or minus 0.2 payments)
Pat can make an infinite number of annual withdrawals of $60,000.00 in retirement
D is not correct and neither A, B, nor C is within .02 payments of the correct answer
QUESTION 2
-
James plans to save $19,400.00 per year until he retires. His first savings contribution to his retirement account is expected in 1 year from today. James plans to retire in 6 years from today, immediately after making his last $19,400.00 contribution to his retirement account. He then plans to be retired for 6 years. James expects to earn 7.00 percent per year in his retirement account, both before and during his retirement. If James receives equal annual payments from his retirement account during his retirement with the first of these annual retirement payments received in 1 year after he retires and the last of these annual retirement payments received in 6 years after he retires, then how much can James expect each of his annual retirement payments to be?
$23,698.93 (plus or minus $10)
$29,114.17 (plus or minus $10)
$27,209.50 (plus or minus $10)
$23,240.14 (plus or minus $10)
None of the above is within $10 of the correct answer
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started