How large a fund will you need

Reference no: EM131111454

You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.

a. How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity?

b. How much will you need today as a single amount to provide the fund calculated in part a if you earn only 9% per year during the 20 years preceding retirement?

c. What effect would an increase in the rate you can earn both during and prior to retirement have on the values found in parts a and b? Explain.

d. Now assume that you will earn 10% from now through the end of your retirement. You want to make 20 end-of-year deposits into your retirement account that will fund the 30-year stream of $20,000 annual annuity payments. How large do your annual deposits have to be?

Reference no: EM131111454

Questions Cloud

Would strictly following wilsons have created the stability : Taking everything into consideration would strictly following Wilson's 14 Points have created the stability that was necessary to bring a successful end to the war?

How much will you need today as a single amount : How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity? How much will you need today as a single amount to provide the fund calculated in part a if you earn only 9% per year during the 20 years p..

Discuss the purpose of the management tool : Bow-Tie Analysis is one of many efffective tools for communicating risk assessment. Discuss the bow-tie method and then provide another specific example of an effective tool that hospitals use for risk assessment. Which one would you implement in..

Question regarding the cyberbullying : Your outline and presentation should include the following components: Define your topic, linking it to technology and society

How large a fund will you need : How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity? How much will you need today as a single amount to provide the fund calculated in part a if you earn only 9% per year during the 20 years p..

The orange juice produced by a manufacturer : The quality of the orange juice produced by a manufacturer (e.g., Minute Maid,Tropicana) is constantly monitored. There are numerous sensory and chemical components that combine to make the best tasting orange juice.

Compare concerns in the u.s. with other countries : For this Application, write a 4-page paper outlining the health concerns related to global climate change. Include health promotion/health protection strategies a BSN nurse could implement. Compare concerns in the U.S. with other countries.

Construct a scattergram for these data : a. Construct a scattergram for these data. b. What does the scattergram suggest about the relationship between x and y?

Returns the rows necessary to insert records : Write a query that returns the rows necessary to insert records into the RENTAL table. Write a query that returns the rows necessary to insert records into the RENTAL_ITEM table.

User Account

All Pages