Score: 0 of 1 pt 6 of 12 16 complete) HW Score: 41.67%, 5 of 12 pts P 4-25 (similar to) Question Help 0 You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can eam 6.5% per year on your investments and you plan to retire in 34 years, immediately after making your last $4.000 investment a. How much will you have in your retirement account on the day you retiro? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be c. If you hope to live for 24 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 24th withdrawal (assume your savings will continue to sam 6.5% in retirement? d. If, instead, you decide to withdraw $92,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will take until you exhaust your savings? (Use trial and error, a financial calculator solve for " Nor Excel: function NPER) e. Assuming the most you can afford to save is $800 per year, but you want to retire with $1.000.000 in your investment account, how high of a return do you need to eam on your investments? (Use trial-and-error, a financial calculator solve for the interest rate, or Excel: function RATE) a. How much will you have in your retirement account on the day you retire? The amount in the retirement account in 34 years would be $ 462,102.12. (Round to the nearest cent.) b. 1, instead of investing 54,000 per year, you wanted to make one lump som investment today for your retirement that will result in the same retromert saving, how much would that turp sum need to be? You will need to make one lump sum investment today of (Round to the nearest cent.) Homework: Chapter 4 Homework S Score: 0 of 1 pt 8 of 12 (7 complete) HW Score: 41.67%, 5 of 12 P 4-29 (similar to) Question Help You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug's profits will be $2 million in its first year and that this amour will grow at a rate of 2% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero What is the present value of the new drug if the interest rate is 7% per year? The present value of the new drug is $ million (Round to three decimal places) Homework: Chapter 4 Homework Score: 0 of 1 pt 9 of 12 (7 complete) P 4-32 (similar to) You have an investment account that started with $4,000 10 years ago and which now has grown to $12,000. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the investment account earns 15% per year from now on, what will the account's value be 10 years from now? a. What annual rate of return have you earned (you have made no additional contributions to the account)? Your annual rate of return is %. (Round to two decimal places.) (42959) Fall 2020 Hassan Elganzoury & 109/24/20 2:39 A Homework: Chapter 4 Homework S. Score: 0 of 1 pt