Question: You believe you will spend $40,000 per year for 20 years once you retire in 40 years. If the interest rate is 5% per year,

You believe you will spend $40,000 per year for 20 years once you retire in 40 years. If the interest rate is 5% per year, how much must you save each year until retirement to meet your retirement goal?

Step by Step Solution

★★★★★

3.51 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

By the time you retire you will need 40000 future value annuity fa... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1351-B-A-A-A-M(68).docx

120 KBs Word File

Students Have Also Explored These Related Advanced Accounting Questions!

You believe you will spend $40,000 a year for 20 years once you retire in 40 years. If the interest rate is 6% per year, how much must you save each year until retirement to meet your retirement goal?

You plan to retire in 30 years and want to accumulate enough by then to provide yourself with $30,000 a year for 15 years. a. If the interest rate is 10%, how much must you accumulate by the time you...

You are thinking of building a new machine that will save you $1000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever. What is...

Your brother Gavin and his wife Lisa have a newborn son, Martin. They are saving for their son's university education. They estimate that university expenses will run at $40 000 per year when their...

You just turned 2 2 and decide that you would like to save up enough money so as to be able to withdraw $ 8 0 , 0 0 0 per year for 2 0 years after you retire at age 6 5 , with the first withdrawal...

can anyone show work? You have a lump sum payment of $28,000 due to be paid to you in two years from your investment in a local business. The business has done well and the owner has offered to pay...

Hello please answer to the following question. good luck 29. Annuities. You can buy a car that is advertised for $24,000 on the following terms: (a) pay $24,000 and receive a $2,000 rebate from the...

Problem Set 5 Problem 1 Annuity and Perpetuity a) Derive PV formula for a perpetuity with payment x and interest equal to r b) Derive PV formula for annuity with payment x, maturity T, interest rate...

May i please have assistance with solving the following questions in Excel? A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 B...

Can you please explain me questions 6 and 7 under section 17.6? To be honest I did not understand why the true value of the firm before the repurchase is $3000. I would assume that it is $2500...

What is the output y(t) (at steady-state of course), given the input x(t) = 3+cos(30t)+ cos(90t) + cos(150t) and assuming the FRF of you system shown below. Mas (4B) 30 20 10 0 -10

The following account balances are available for Tenfour Trucking Company on January 31, 2010: Cash .................. $ 27,340 Accounts Receivable ............. 41,500 Prepaid Insurance...

Solve xy ' + 4 y = x ^ 2 - ( 1 / x ^ 2 )

How would the change in total economic surplus be affected if the law instead required health insurance to pay only $500 per procedure? (LO2)

Du Pont Identity Construct the Du Pont identity for Smolira Golf Corp.

Statement of Cash Flows Prepare the 2007 statement of cash flows for Smolira Golf Corp

A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent. Round "PV Factor" to 3 decimal places. Omit the "$" sign in your responses. Question 12 (1 point) a.) What should...

Problem 2 8 - 1 2 ( Future Value of an Annuity ) Future Value of an Annuity Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1 , so...

Adam Nichols, a former disc golf star, operates Marigold Corp.. At the beginning of the current season on April 1, the ledger of Marigold Corp. showed Cash $1,800, Inventory $2,600, and Common Stock...