Comes to saving for retirement

Assignment Help Financial Management
Reference no: EM131300232

Kaitlyn Tabor, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $3,000 per year for her retirement fund and assumes that she"ll retire at age 65.

A. How much will she have accumulated when she turns 65 if she invests in equities and earns 8% on average?

B. Kaitlyn is urging her firned, Stuart Pyle, to start his plan right away, too, because he's 35. What would his nest egg amount to if he invested in the same manner as Kaitlyn and he, too, retires at age 65? Comment on your findings.

Reference no: EM131300232

Questions Cloud

What is the apr on this loan and ear on this loan : You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 35-year mortgage loan for 85 percent of the $3,800,000 purchase price. The monthly payment on this loan will be $17,900. What is the APR on this loan? What is the..
What happens to value of your investment if interest rates : Suppose you just bought a 15-year annuity of $7,400 per year at the current interest rate of 11 percent per year. What is the value of your annuity today? What happens to the value of your investment if interest rates suddenly drop to 6 percent?
Beta of the portfolio is equal to the average of the betas : For a portfolio of 40 randomly selected stocks, which of the following is most likely to be true? The beta of the portfolio is equal to the average of the betas of the individual stocks
Pros and cons in regards to two corporations merging : When two corporations merge, there are pros and cons to such an action. Name at least 2 pros and 2 cons in regards to two corporations merging, then state your personal outlook on whether these mergers (most of the time) are a good or bad idea.
Comes to saving for retirement : Kaitlyn Tabor, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $3,000 per year for her retirement fund and assumes that she"ll retire a..
Bond interest payments before and after taxes : Bond interest payments before and after taxes Charter Corp. has issued 1,801 debentures with a total principal value of ?$1,801,000. The bonds have a coupon interest rate of 6?%. What dollar amount of interest per bond can an investor expect to recei..
Invest and is looking for long-term return : As a long-time investment expert, you have come to firmly believe in the following rules: If a person is age thirty-five or younger, and is married, then he or she should invest in securities. If a person has less than $20,000 to invest and is lookin..
Compute the current yield and capital gains yield : Dynamic Systems has an outstanding bond that has a $1,000 par value and a 7 percent coupon rate. Interest is paid semiannually. The bond has 11 years remaining until it matures. Today the going interest rate is 10 percent, and it is expected to remai..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Provide social security benefits to future retirees

Which of the following is not a proposal for insuring that sufficient funds will be available to provide Social Security benefits to future retirees?

  Prepared to make equal annual deposits

You want to have $81,000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.80 percent interest, what amount must you deposit each year?

  What is the market price of the bond

A bond pays an annual coupon of $121 has a face value of $1,000 and has 6 years remaining until maturity. If the current market required rate of return on bonds of this type is 9% what is the market price of the bond? State your answer in dollars and..

  Conservative and aggressive investors

Describe how, if at all, conservative and aggressive investors might use each of the following type of transactions as part of their investment programs. Contrast these two types of investors in view of these preferences. a. Long purchase b. Margin t..

  Does your country have fixed or floating exchange rates

The currency of your country. Is it stable? Does your country have fixed or floating exchange rates? Does the exchange rate fluctuate a lot? The banking system in your country.

  What is the most you would pay per share

The dividend for Should I, Inc., is currently $1.4 per share. It is expected to grow at 16 percent next year and then decline linearly to a 4 percent perpetual rate beginning in four years. If you require a 22 percent return on the stock, what is the..

  Project has an initial cost-expected net cash inflows

A project has an initial cost of $43,025, expected net cash inflows of $14,000 per year for 9 years, and a cost of capital of 9%. What is the project's NPV? Do not round your intermediate calculations. Round your answer to the nearest cent. A project..

  What he will earn by paying taxes prior to deposit

Timothy Clum is in the 25 percent tax bracket and is considering the tax consequences of investing $2,000 at the end of each year for 30 years, assuming the investment earns 8 percent annually. What is the amount of earnings that Timothy gives up by ..

  Dividends that each stock paid during the year

The table below shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. Company Shares Beginning of Year Price Dividend Per Share End of Year Price John..

  What is the expected return of the stock

The Bumble Bee. Corp. has a beta of 1.45. You observed the risk free rate of return to be 6.5% and the market risk premium of 5%. What is the expected return of the stock?

  What is expected return for each of given investment option

what is the expected return for each of these investment options- How can you explain to your friend why the expected returns of each investment are different?

  Should ebay establish the distribution cente

Ebay is considering whether to establish a sale distribution center in China. Given the large Chinese consumer market, Eaby estimates that its net sales revenues will be 15 million yuans in the first year, 20 million yuans in the second year, and 35 ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd