You are trying to decide how much to save for retirement. Assume you plan to save $6,500 per year with the first investment made one year from now. You think you can earn 7.0 per year on your investments and you plan to return in 29 years, immediately after making your last $6,500 investment.
a. How much will you have in your retirement account on the day you retire?
b. If, instead of investing $6,500 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 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 withdrawal (assume our savings will continue to earn 7.0% in retirement)?
d. If instead, you decide to withdraw $114,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take until you exhaust your savings? (Use trial-and-error, a financial calculator: solve for ''N'', or Excel function NPER)
e. Assuming the most you can afford to save $1,300 per year, but you want to retire with $1,000,000 in your investment account, how high of a return do you need to earn on your investment? (Use trial-and-error, a financial calculator: solve for the interest rate, or Excel function RATE)
Answers
a. You will have approximately $622,345.81 in your retirement account on the day you retire. b. The lump sum needed today for the same retirement savings is approximately $91,997.43. c. You can withdraw approximately $52,969.22 every year in retirement. d. The interest rate required to reach $1,000,000 with an annual savings of $1,300 depends on the number of years until retirement. e. The retirement period is not specified, it's not possible to provide a specific interest rate.
a. To calculate the amount in your retirement account on the day you retire, you can use the future value of an ordinary annuity formula. Given an annual savings of $6,500, an interest rate of 7%, and a retirement period of 29 years, the formula is:
Future value = Payment × \(((1 + Interest rate)^(Number of periods - 1)) / Interest rate\)
Substituting the values into the formula:
Future value = $6,500 × ((1 + 0.07)^29 - 1) / 0.07
Calculating the future value:
Future value ≈ $622,345.81
Therefore, you will have approximately $622,345.81 in your retirement account on the day you retire.
b. To determine the lump sum needed today for the same retirement savings, you can use the present value of an ordinary annuity formula. Given an annual savings of $6,500, an interest rate of 7%, and a retirement period of 29 years, the formula is:
Present value = Payment × ((1 - \((1 + Interest rate)^(-Number of periods)) / Interest rate)\)
Substituting the values into the formula:
Present value = $6,500 × \(((1 - (1 + 0.07)^(-29)) / 0.07)\)
Calculating the present value:
Present value ≈ $91,997.43
Therefore, the lump sum needed today for the same retirement savings is approximately $91,997.43.
c. To calculate the annual withdrawal in retirement, you can use the annuity payment formula. Given a retirement period of 24 years, an interest rate of 7%, and a desired exhaustion of savings, the formula is:
Annual withdrawal = Future value × Interest rate / ((1 + Interest rate)^Number of periods - 1)
Substituting the values into the formula:
Annual withdrawal = $622,345.81 × 0.07 /\(((1 + 0.07)^(24 - 1))\)
Calculating the annual withdrawal:
Annual withdrawal ≈ $52,969.22
Therefore, you can withdraw approximately $52,969.22 every year in retirement.
d. To determine the number of years it will take until your savings are exhausted, you can use the annuity period formula. Given an annual withdrawal of $114,000, an interest rate of 7%, and the current savings amount, the formula is:
Number of periods = log(Annual withdrawal × Interest rate / (Annual withdrawal - Future value × Interest rate)) / log(1 + Interest rate)
Substituting the values into the formula:
Number of periods ≈ log($114,000 × 0.07 / ($114,000 - $622,345.81 × 0.07)) / log(1 + 0.07)
Calculating the number of periods:
Number of periods ≈ 10.83 years
Therefore, it will take approximately 10.83 years until your savings are exhausted with an annual withdrawal of $114,000.
e. To determine the required interest rate, you can use the rate of return formula. Given an annual savings of $1,300, a desired future value of $1,000,000, and a retirement period, the formula is:
Interest rate = \(((Future value / Present value)^(1 / Number of periods)) - 1\)
Substituting the values into the formula:
Interest rate = \((($1,000,000 / $1,300)^(1 / Number of periods)) - 1\)
Since the retirement period is not specified, it's not possible to provide a specific interest rate. The interest rate required to reach $1,000,000 with an annual savings of $1,300 depends on the number of years until retirement.
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Related Questions
YOOOOOOOOOOO just wanted to say
Answers
Answer:
wassup
Explanation:
Which condition is a result of open competition in a free market system?
A. Poor customer service
B. Government regulation
C. Higher prices
D. Higher quality goods
Answers
A result of open competition in a free market system is higher quality goods (option D).
What is the result of open competition?
Competition is when there are many producers operating in a particular industry. Competition is high in purely competitive markets and low in a monopoly. This is because in a pure competition, there are many producers while there is only one producer in a monopoly.
Due to the high level of competition in an industry, prices would be more likely to be low. This is because producers would want to attract more consumers by fairly pricing their goods. Also, producers would want to offer good customer service in order to retain consumers as there are many competing producers in the market. High quality goods are also a way to attract an retain customers.
A free market system is a market system where prices are set by the forces of demand and supply. There is no government regulation in this type of market.
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Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats. If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by
Answers
Answer:
see. I hope it's helpful for you lolExplanation:
i need friend lol can you my friend
Agent Harriet Walker has recently begun marketing Medicare Advantage and related products aimed at meeting the needs of senior citizens. Client Mildred Jones has expressed interest in a Medicare Advantage plan. It is now the beginning of September. If you were in Agent Walker's position, what would you do?
Answers
Answer:
Inquire whether the client qualifies for a special enrollment period, and if not, solicit an enrollment application once the annual open enrollment election period begins on October 15th.
Explanation:
In this scenario where Agent Harriet Walker is marketing Medicare Advantage and related products aimed at meeting the needs of senior citizens.
If Client Mildred Jones has expressed interest in a Medicare Advantage plan and it is now the beginning of September.
The best action is to enroll her of she qualifies for special enrollment period.
If she is not qualified she should solicit an enrollment application once the annual open enrollment election period begins on October 15th.
Harriet should keep engaging Mildred's interest till 15th October.
A yield can be paid in the form of?
Answers
Answer:
both a and b
Explanation:
In the global financial crisis box in section 6.2, bloomberg reported that the three-month treasury bill sold for a price of $100.002556 per $100 face value. what is the yield to maturity of this bond, expressed as an ear?
Answers
Based on the price the three-month treasury bill was sold at, and the face value, the yield to maturity as an EAR would be -0.010223%.
What is the yield to maturity as an EAR?First find the 3 month yield to maturity:
= Face value / Sale value
= 100 / 100.002556
= -0.002556%
Expressed as an EAR, this is:
= (1 - 0.002556/100.002556)⁴ - 1
= -0.010223%
The Annual yield to maturity would be:
= -0.002556% x 3 / 12 monts
= -0.010224%
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Which of the following is an example of an effective persuasive speech topic for a group of elementary school children? (edge 2022)
a.
the origins of Santa Claus in different cultures around the world
b.
abstinence: the best protection
c.
read at least 20 minutes a day
d.
staying in school is cool
Answers
what is a business plan
Answers
Answer:
A business plan is a written document that describes in detail how a business usually a startup may defines its objectives and how it is to go about achieving its goals.
Answer:
According to Wikipedia, A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals.
What does ceteris paribus mean?
Answers
Answer:
rat
Explanatio
when consumed, many goods and services have an impact on other people not using the product. Which word describes this impact ?
A. appreciation
B. depreciation
C. externality
D. inflation
Answers
Answer:
Explanation:
depreciation
When consumed, many goods and services have an impact on other people not using the product. Depreciation word describes this impact. The correct option is B.
What does it mean to deprecate a product?Application developers who have already subscribed to a product may still use it after it is deprecated, but no new developers may do so. We disapprove of this use of company funds for political activities. to say that you disapprove of something.
In order to maintain backward compatibility and give programmers time to bring affected code into compliance with the new standard, features are deprecated rather than immediately removed. The following are some of the primary causes of depreciation: A more potent substitute feature has taken the place of the former feature.
Thus, the ideal selection is option B.
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Answers
if a boat with a value of $19,000 depreciates at a rate of 17% per year, what is the value of the boat after 3 years?
Answers
The value of Boat with 17% depreciation rate per year will be $10,863.95 after 3 years.
What is Depreciation?
Depreciation represents the calculable decrease in value of assets with time. Tangible assets like buildings, instrumentation and vehicles area unit purchased at massive sums.
Formula to calculate Depreciation in the value of asset
A=P(1-r)∧T
Here, A is value of asset after depreciation(calculation)
P is Principal value(Actual price at which the asset was bought)
r is rate of depreciation annually in decimal
T is time period in years
We can use this formula for calculating the given problem.
Solution:
Converting rate in decimal, we get
Principal(P)=19000
Time(T)=3 years
r=17/100=0.17
A=P(1-r)∧T
⇒A=19000x(1-0.17)∧3
⇒A=19000x(0.83)∧3
⇒A=19000x0.571787
⇒A=10,863.953
Hence, the value of the boat after 3 years will be $10,863.953
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Which of these is a transferable skill?
a.
computer coding
b.
expertise in baking bread
c.
knowledge about wines
d.
time-management skills
Answers
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00. What would the net value of a long straddle position be if the stock price at expiration is $35?
A) 7.15
B) $1.15
C) $1.15
D) $7.15
E) $36.15
Answers
Answer:
$1.15
Explanation:
Calculation for the net value of a long straddle position
Using this formula
Net value =(Stock price at expiration-Strike price)-Put option selling-Call option selling
Let plug in the formula
Net value = ($35-$29)-$2.90-$1.95
Net value=$6-$2.90-$1.95
Net value=$1.15
Therefore the net value of a long straddle position will be $1.15
Personal selling can be part of ____ and involves direct spoken communication between sellers and customers
Process
Price
Promotion
Product
Answers
Personal selling can be part of Promotion and involves direct spoken communication between sellers and customers.
What is Personal selling?
Personal selling is a face-to-face sales method where a salesman uses their people abilities to convince a consumer to purchase a specific product. The salesperson tries to persuade the consumer that the product will only add value by emphasizing its different qualities.
Door-to-door sales are one of the typical forms of personal selling. To market and sell the goods/services, salespeople knock on the doors of potential clients. With their excellent interpersonal skills, they attempt to persuade people to purchase from them.
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Pr 8-3a budgeted income statement and supporting budgets obj. 4 the budget director of birding homes & feeders inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for january: a. estimated sales for january: bird house . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 units at $25 per unit bird feeder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 units at $15 per unit
Answers
Estimated sales for January: bird house $375,000 total of 15,000 units at $25 per unit bird feeder $600,000 of 40,000 units at $15 per unit.
What is the income statement formula?Net Income = Revenues - Expenses is the fundamental formula for an income statement. This straightforward equation illustrates the business' profitability. The company is profitable if revenues exceed expenses.
Why is an income statement important?Business owners can tell whether their organization is headed toward profitability or losses using income statements. Due to the full breakdown of income and spending in an income statement, business owners can determine what has to be changed in order to boost revenues or reduce costs.
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The idea that each country should be allowed to choose its own inflation rate is called the ________ argument.
Answers
The idea that each country should be allowed to choose its own inflation rate is called the monetary autonomy argument.
Inflation refers to a standard growth in the prices of goods and offerings in a financial system. whilst the overall rate stage rises, every unit of forex buys fewer items and offerings; therefore, inflation corresponds to a discount within the purchasing energy of cash.
Inflation is the fee of boom in costs over a given period of time. Inflation is typically a large degree, inclusive of the general increase in expenses or the boom in the value of residing in a country.
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Which is a characteristic of the takeoff stage of Rostow's Five Stages of Economic
Growth?
The labor of a country is unskilled and focuses on agricultural production, animal husbandry, and the harvesting of timber.
Advancements in technology require a skilled labor force competent in electronics, medicine, and engineering.
The population as a whole has its basic needs met and enjoys a high
standard of living focused on consumer goods.
A country begins to grow rapidly and new industries start to emerge that
drive further economic development.
Answers
The characteristic of the takeoff stage of Rostow's Five Stages of Economic Growth is: A country begins to grow rapidly, and new industries start to emerge that drive further economic development.
What is Economic Growth?The economy expands significantly during the takeoff phase as it shifts from traditional industries to more contemporary and industrial sectors. New industries frequently grow as a result of greater investment and technical development.
This expansion supports subsequent economic growth and creates the conditions for long-term advancement. Rapid industrialisation and economic structural change are occurring at this time.
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In order to provide more complete information, u.s. gaap allows that any significant noncash investing and financing activities may be reported:____.
Answers
It is reported as foot notes in cashflow statement or in the notes of financial statements.
When an income statement is converted to cash flows from operational operations, noncash items like as depreciation and nonoperating profits and losses are not included. Non-cash investing and financing entails making an investment or purchase using financial instruments other than cash.
The Generally Accepted Accounting Principles (GAAP) are a collection of generally observed financial reporting accounting standards and regulations. The four main constraints of GAAP are objectivity, the materiality, the consistency, and the prudence.
Companies are required by both IFRS and US GAAP to declare any substantial non-cash investment and financing operations, either as a footnote at the bottom of the statement of the cash flows or in notes to the financial statements.
Therefore, the answer is the bottom of the statement of the cash flows or in the notes to financial statements.
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An agreement between a potential customer and insurance company where the driver pays the premium, but company pays for the damages or theft?
Answers
Automobile insurance is where the driver pays the premium, but the company pays for the damages or theft.
What is a company?A set of individuals can get together to constitute a corporation, which is a legal body used to conduct and manage commercial or manufacturing business operations.
An automobile Insurance Company usually takes insurance premiums from the person and when at the time of any sort of accident or at the time of claim they pay for the damages that are being made.
The insurance can be claimed in case of theft, accident, any sort of damage, etc.
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What is a mutual fund
Answers
Answer: A mutal fund is a professionally managed investment fund that pools money from many investors to purchase securities. the term is typically used in the United States, Canada, and India while simular structures across the globe include the SICAV in Europe and open-ended investment company in the UK.
Explanation:
a(n) _____ is a group of files or folders that help a user to organize items.
Answers
A folder is a group of files or folders that help a user to organize items.
A computer folder is a virtual location where programs, files, and other folders may be stored. Folders are also known as directories or catalogs. Folders are often displayed with icons that help to depict the contents and their function to the user. Folders are used to manage the storage of files in a logical and structured manner. The folder structure can be organized in any manner that makes sense to the user and can be changed as required. Folders are a useful tool for organizing and managing files on a computer. They can be used to group related files together, to separate different types of files, or to sort files by date, name, or other criteria. The organization of folders and files can make it easier to find and access files when needed. For example, a user might create a folder for work-related files and another folder for personal files. Inside each of these folders, the user can further categorize files by project or type of file. This can help the user to quickly find the file they need when working on a project.
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in 2030 in the country farmland , there are three residents: the farmer , the miller, and the baker. the residents of farmland import and export goods to and from industrialland and marketland. use the following (i)-(iv) to answer parts a-f. (i) the farmer grows wheat which they sell to the miller for $2,000 (ii) the miller uses the wheat they purchased from the farmer to ground $5,000 worth of flour. they sell $3,000 of the flour to the baker and they sell $2,000 of the flour to residents of marketland. (iii) the baker uses the flour to bake $15,000 worth of bread. $9,000 worth of the bread is sold to residents of breadland and $6,000 worth of the bread is exported to industrialland. (iv) the residents of farmland purchase $4,000 worth of carrots to consume from marketland. (iv) the baker wants to expand their business and buys a new $4,000 oven which they import from industrial land. (iv) the farmer , the miller, and the baker each pay $500 in taxes to the government of farmland , which then pays the baker $2,000 to build a road. please answer the following questions: what is total consumption (personal expenditures) in farmland ? what is total business investment in farmland? what are total government expenditures in farmland ? what are total exports in farmland ? what are total imports farmland ? calculate gdp in farmland ?
Answers
The final product that is sold to the end user after being produced is referred to as a final good. Goods used in the production process are called intermediate goods. Bread-making wheat, for instance, is an intermediate good.
What are some examples of intermediate goods?Goods that are used to make final goods are called intermediate goods. Wheat, soil, crude oil, steel, sugar, and other items are all examples of intermediate goods.
$180
Gross domestic product is the last worth of the bread which is $180. Only final goods are included in GDP.
b. Farmhand: Miller: $100 minus zero $150-$100 = $50
Baker: $180-$150 = $30
c. $100+$50+$30 = $180. This is equivalent to Gross domestic product which shows Gross domestic product can be determined by taking a gander at the amount of added worth of every great rather than simply the last great's cost.
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g Suppose the own price elasticity of demand for good X is -3, its income elasticity is 2, and the cross price elasticity of demand between good X and Y is -5. Determine how much the consumption of this good will change if: 1. The price of good X increases by 5% 2. The price of good Y increases by 12%
Answers
Answer:
Sry, I can't understand anything at all!
با ما
Outline two reasons why a business such as AEC could not be
Successful without other firms providing natural resources
Answers
Answer:
Because of product's use of natural resources in its input (1) and dependence on the supply chain system of other companies.
Explanation:
The reason is that all of the companies rely on natural resources that the companies are processing and making it available for the other companies to utilize it to control its cost and complete the production of the products. The energy is a natural resource which every company utilizes and due to this its production is largely dependent on the firms that are processing natural resources to make it available for companies to utilize it.
The next most important thing is supply chain system of natural resource companies that helps the companies like AEC and even an individual to make the use of these natural resources in an efficient and effective manner. If I don't have access to fuel, then I cann't travel and traveling by using horses would be expensive and time consuming. So supply chain system of the other businesses play key role here.
The association stradegy is used to_________information
Answers
Answer:
The association strategy is used to help memorized information.
Explanation:
A benefit of using association is that it allows the learner to be creative and have fun. ... The association strategy is used to help memorized information.
According to the unit, what percentage of shoppers used a coupon in 2012?
A. 78%
B. 85%
C. 93%
D. 100%
Answers
today's world, 96% of consumers have used a coupon in the past 90 days. JC Penney tried to break consumers of the coupon habit in 2012 and quickly saw a 23% drop in sales for the first three quarters of 2012. If JC Penney couldn't change people's shopping behavior, you probably can't either.n: so i guess its c
Answer:
78%
Explanation:
I take nutrition and wellness, and this was the correct answer for me. Just took the test as well :P
power drive corporation has the following beginning balances in its stockholders' equity accounts on january 1, 2021: common stock, $100,000; additional paid-in capital, $5,500,000; and retained earnings, $3,000,000. net income for the year ended december 31, 2021, is $700,000. required: prepare the statement of stockholders' equity for power drive corporation for the year ended december 31, 2021.
Answers
The total stockholders' equity at the end of the year is $9,300,000, which is the sum of the common stock, additional paid-in capital, and retained earnings.
Statement of Stockholders' Equity
For the Year Ended December 31, 2021
Common Stock:
Beginning Balance: $100,000
No changes during the year
Ending Balance: $100,000
Additional Paid-in Capital:
Beginning Balance: $5,500,000
No changes during the year
Ending Balance: $5,500,000
Retained Earnings:
Beginning Balance: $3,000,000
Add: Net Income for the Year: $700,000
Ending Balance: $3,700,000
Total Stockholders' Equity:
Common Stock: $100,000
Additional Paid-in Capital: $5,500,000
Retained Earnings: $3,700,000
Total: $9,300,000
The statement of stockholders' equity shows the changes in the company's stockholders' equity accounts during the year. In this case, there were no changes in the common stock and additional paid-in capital accounts. The retained earnings account increased by $700,000 due to the net income earned during the year.
The total stockholders' equity at the end of the year is $9,300,000, which is the sum of the common stock, additional paid-in capital, and retained earnings.
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Which law or regulation requires that the ceo and cfo of public companies must certify in writing that their company’s annual and quarterly reports are accurate and complete?.
Answers
The Sarbanes-Oxley Act of 2002 is the law that requires that the ceo and cfo of public companies must certify in writing that their company’s annual and quarterly reports are accurate and complete.
What is a law?
This is the term that is used to refer to the legal rules and regulations that have being set up in a place that has the aim of being able to guide the behaviors of the people that live in a particular geographical area.
The section 302 of this law is what requires the CEOs to do what has been requested in this question that we have here.
The Sarbanes-Oxley Act of 2002 was passed by the congress of the United States. The reason why that law was passed was deu to the fact that the investors in the nation were to be protected from all activities of fraud.
Hence we would say that The Sarbanes-Oxley Act of 2002 is the law that requires that the ceo and cfo of public companies must certify in writing that their company’s annual and quarterly reports are accurate and complete.
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The number one reason risk pooling is valuable to the insurance industry is... A. It allows companies to charge the same premium to all members of the pool. B. It brings together many individuals' premiums so that there is money to cover the select few with losses. C. It makes insurance coverage available to everyone, even those who are unable to make their payments. D. It is subsidized by the federal government.
Answers
The reason for risk pooling which is beneficial for the insurance industry is best described as it brings together many individuals' premiums so that there is money to cover a selected few losses.
Option B is the correct answer.
Who is a policyholder?The policyholder is an individual who takes an insurance policy from an insurance company. He pays insurance premiums against their respective policies.
The insurance contract is an agreement between the individuals and insurance company to indemnify them at the happening of the specified event and individuals also agreed to pay the insurance premiums on time. The risk pooling allows the insurance company to get insured many people against a small amount of money called an insurance premium.
Therefore, risk pooling is valuable for the insurance company in respect of the insurance policies.
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