Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are trying to decide how much to save for retirement. Assume you plan to save $7,000 per year with the first investment made one

You are trying to decide how much to save for retirement. Assume you plan to save $7,000 per year with the first investment made one year from now. You think you can earn 5% per year on your investments and you plan to retire in 29 years, immediately after making your last $7,000 investment.

a. How much will you have in your retirement account on the day you retire?

b. If, instead of investing $7,000 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 26 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 26th withdrawal (assume your savings will continue to earn 5% in retirement)?

d. If, instead, you decide to withdraw $30,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take until you exhaust your savings?

e. Assuming the most you can afford to save is $1,400 per year, but you want to retire with $1,000,000.00 in your investment account, how high of a return do you need to earn on your investments?

if it can solve by using HP10 bil+ calculator, please i want to know how to do

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

Fundamentals Of Futures And Options Markets

Authors: Jonn C. Hull

8th International Edition

0133382850, 9780133382853

More Books

Students also viewed these Finance questions

Question

=+3. Who are the brand's competitors?

Answered: 1 week ago

Question

11.7 Discuss competency-based pay.

Answered: 1 week ago