Plan to open a retirement account

Assignment Help Financial Management
Reference no: EM131307811

You plan to open a retirement account. Your employer will match 50% of your deposits up to a limit on the match of $2, 500 per year. You believe the retirement account will earn 12 % per year over the next 30 years. You will make 30 deposits of $5,000 each year from your income and your employer will deposit 50% of each of your deposit into the same retirement account. Assume that the retirement account has $1.8million after your last deposit. If you want to make 30 yearly withdrawals from it, starting 1 year after the last deposit, what amount will you be able to withdraw each year?

Reference no: EM131307811

Questions Cloud

What are the two remedies bill is most likely to use : Bill Buyer ordered 1,000 bushels of wheat from Sam Seller for $2 per bushel, delivery due on July 12, payment due on July 30. Sam didn't deliver on July 12. The market price of wheat on July 12 was $2.25 per bushel, but supply is extremely short. Wha..
Detailed explanation with graph to describe break-even point : Midwest Mining (MWM) expects its sales to grow by 20 percent next year. Last year, when the firm was operating at full capacity, MWM, generated sales equal to $250,000 with assets of $800,000. Estimate MWM's additional funds needed (AFN) for the next..
Traded stock which has a dividend payable to shareholders : Find a publicly traded stock which has a dividend payable to shareholders. Assuming zero growth in the dividend and you require a 8% return, calculate the stock's intrinsic price value. Compare the intrinsic value with the stock's current price. If t..
The prerequisites of an ideally insurable risk : It may be correctly claimed that insurers usually do not pay for losses because: smoking cigarettes is an example of; the norris and manhart cases resulted in which of the following outcomes? from the viewpoint of an insurer, the prerequisites of an ..
Plan to open a retirement account : You plan to open a retirement account. Your employer will match 50% of your deposits up to a limit on the match of $2, 500 per year. You believe the retirement account will earn 12 % per year over the next 30 years.
What is market capitalization : What is the market capitalization (the market value of the common stock = number of shares outstanding x the closing price per share you provided in the question above) of UAL's stock ( comapny name is united airlines) (on the date you gave in Octobe..
Retirement plan that permits him to place monthly amounts : Jose is 25 years old today and has a retirement plan that permits him to place monthly amounts of $150 into a retirement vehicle, beginning one month from now, for 30 consecutive years. What is the most he can spend, per month, throughout all of his ..
About the simple interest : Dr. Vettri invests $2, 500 at 8% per year simple interest for 4 years. At the end of this time, he reinvests the entire amount at 6% per year compounded quarterly for another 9 years. How much money will Dr. Vettri have at the end of the 13^th year?
What investment in net working capitol is required : Naples transportation in binghamton has expansion plans that are expected to increase its inventories by $30 million. naples will also increase its accounts receivable by $15 million and its accounts payable by $8 million. What investment in net work..

Reviews

Write a Review

 

Financial Management Questions & Answers

  New firm in rapidly growing industry

The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 17 percent a year for the next 4 years and then decreasing the growth rate to 3 percent per year. The company just paid its..

  How would it affect your savings amount

Suppose you're going to save for retirement over 30 years, monthly instalments. Your investments fund has been averaging at 8% per year. You would like your investment fund to last you 25 years. If you would like to pull out $3,500 per month after re..

  Find the value of the cash flow stream

Find the value of the following cash flow stream in Year 4 if the appropriate discount rate is 9 percent.

  Two different salary arrangements-investment banking

You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $82,000 per year for the next two years, or you can have $71,000 per year for the next two years, along wi..

  What is the no arbitrage us dollar price of one adr

At this exchange rate, what is the no-arbitrage U.S. dollar price of one ADR? By comparison, Honda ADRs traded at $30.96. Do you think an arbitrage opportunity exists?

  What is the bonds expected rate of return

The market price is $900 for a 10-year bond that pays 8% interest semi annually. What is the bond's expected rate of return? If the required rate of return is 11%, is this bond overpriced, fairly priced, or underpriced? (Please show your calculation)

  Tax rate schedule-how much gain is included in gross income

Scot and Vidia, married taxpayers, earn $184,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule). This year, Fred and Wilma sold their home (sales price $750,000; cost $200,000). Al..

  Bonds on the market with maturity

Hollin Corporation has bonds on the market with 18.5 years to maturity, a YTM of 6.5 percent, and a current price of $1,048. The bonds make semiannual payments. What must the coupon rate be on these bonds? Step by step please.

  Assume that current level of sales

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $79.00. The variable cost per unit is $24.58, Poseidon Swim has average fixed costs per year of $9194. Assume that current level of sales is 451..

  Evaluating two different cookie-baking

You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $61,000, has a 5-year life, and has an annual OCF (after tax) of –$10,800 per year. The Keebler CookieMunster costs $94,000, has a 7-year life, and has an annual OCF (after..

  Firm changed its capital structure to all equity

A firm currently has $40 worth of debt at YTM=5%, $60 worth of equity with cost of equity (RE) equal to 15%. What would be the cost of equity if the firm changed its capital structure to all equity? The tax rate is zero.

  Describe how the level and trend of behavior can be used

Describe how the level and trend of behavior can be used to define a pattern of behavior in a graph showing the data from one phase of a single-subject design.

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