Real value of retirement income

Assignment Help Finance Basics
Reference no: EM131360624

Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retires, that is, until he is 85 years old. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today (he realizes that the real value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, 10 years from now, and he will then get 24 additional annual payments. Inflation is expected to be 5% per year from today forward; he currently has $100,000 saved up; and he expects to earn a return on his savings of 8% per year, annual compounding. To the nearest dollar, how much must he save during each of the next 10 years (with deposits being made at the end of each year) to meet his retirement goal?

Reference no: EM131360624

Questions Cloud

Calculate the allowable torque that can be transmitted : A hollow circular steel shaft has a 100-mm outside diameter and a 75-mm inside diameter. Calculate the allowable torque that can be transmitted if the allowable shear stress is 62 MPa.
Identify logistics management strategies : After reading further background material on the company and relevant case studies on related companies the case, prepare a 2000 - 2500 word report analysing the issues in the case, and identify logistics management strategies to resolve the issue..
Only source of retirement income : What are the major weaknesses of this financial plan? Assume this is the only source of retirement income.
Compute the percentage of the torsional strength lost : A hollow shaft is produced by boring a 150-mm-diameter concentric core in a 225-mm-diameter solid circular shaft. Compute the percentage of the torsional strength lost.
Real value of retirement income : He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today (he realizes that the real value of his retirement income will decline year by year after he retires).
Calculate the belt tension p3 : Pulleys C and D are attached to shaft AB, as shown.  - Calculate the belt tension P3. - the maximum shear stress in the shaft.
Winner of a breakfast cereal competition : (A) As the winner of a breakfast cereal competition, you can choose one of the following prizes:
Explain the differences between obscenity and pornography : Explain the differences between obscenity and pornography. Considering child and adult pornography, state the cases both for and against the belief that viewing pornography contributes to the commission of sex crimes.
Rapidly rising cost of a college education : A father, concerned about the rapidly rising cost of a college education, is planning a savings program to put his daughter through college. She is now 13 years old, plans to enroll in the university in 5-years time

Reviews

Write a Review

Finance Basics Questions & Answers

  Traditional religion and native american religions

Identify key concepts of both African traditional religion and Native American religions. Based on these concepts, what similarities are there among these two groups? How do they differ?

  What is the most expensive car you could afford

You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $450. The loan would have a 11% APR based on end-of-month payments.

  If the net profit margin is 5 asset turnover is 200 the

if the net profit margin is 5 asset turnover is 2.00 the equity multiplier also called financial leverage ratio is 4.00

  What is your quarterly payment

You borrowed $27,000 for your education to be repaid in quarterly installments for five years. If the interest rate is 9% compounded quarterly what is your quarterly payment?

  Considering setting up a software development business

You are an expert at working with PCs and are considering setting up a software development business. To set up the enterprise, you anticipate that you will need to acquire computer hardware costing $ 100000 (The lifetime of this hardware is five ..

  The true owners of the corporation are the

The true owners of the corporation are the

  Describe the role of financial institutions in our economy

Describe the role of the financial institutions and financial markets in our economy. Differentiate between primary and secondary markets. Differentiate between money and capital markets.

  How given developments affect banks desired equity ratios

How does each of the given developments affect banks' desired equity ratios?- An increase in OBS activities- A shift from C&I lending to real estate lending.

  An owner of a growing business hires you as a consultant he

an owner of a growing business hires you as a consultant. he is concerned about rising payroll costs and also concerned

  Capm and required return

Bradford Manufacturing Company has a beta of 2.2, while Farley Industries has a beta of 0.75. The required return on an index fund that holds the entire stock market is 13%.

  What is the normal balance of given accounts

What is the normal balance of each of these accounts?-  cash-  sales-  notes payable-  inventory- and retained earnings.

  Determine the amount of debt outstanding

Cooper Inc's latest earnings per share (EPS) was $4.38, its book value per share was $16.00, it had 196,000 shares outstanding, and its debt ratio was 38%.

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