How much can you withdraw each year in retirement

Assignment Help Financial Management
Reference no: EM131304859

You won a contest at a local business that has paid you a single $5,000. At 22, you have decided to invest these funds for 45 years until you retire. During this time your account will earn 13%, compounded annually, every year. As soon as you retire (exactly 45 years from today) you will start withdrawing retirement funds every year for an additional 33 years, but you are investing more conservatively at 8% compounded annually. How much can you withdraw each year in retirement?

Reference no: EM131304859

Questions Cloud

Which layers in the tcp/ip protocol suite need to be changed : Assume that an application-layer protocol is written to use the services of UDP. Can the application-layer protocol uses the services of TCP without change?
Explain how public policy has shaped the development : Explain the governing board's role in these strategic initiatives, determining its responsibility and involvement.Evidence-based management means that operational and strategic decisions are made based upon the evidence that goals and objectives ar..
Describe the competitive advantage of your selected company : Analyze the competitive advantage of your selected company. Evaluate the strategies your selected company uses to create value and gain competitive advantage.
What will monthly payments be during year one : A basic ARM is made for $200,000 at an initial interest rate of 6% for 30 years with an annual reset date. The borrower believes that the interest rate at the beginning of year 2 will increase to 7%. Assuming that a fully amortizing loan is made, wha..
How much can you withdraw each year in retirement : You won a contest at a local business that has paid you a single $5,000. At 22, you have decided to invest these funds for 45 years until you retire. During this time your account will earn 13%, compounded annually, every year. As soon as you retire ..
Price level adjusted mortgage : A price level adjusted mortgage (PLAM) is made with the following terms: Amount=95000, Initial interest rate=4%, Term=30 yrs, Points = 6%. Payments are to be adjusted at the beginning of each year. Assuming inflation is expected to be 6% per year for..
Explain the difference between correlation and regression : Explanation of your regression analysis, why you are using regression, what information is provided by each statistic, and the scatterplot. Explain the difference between correlation and regression.
Write a comment on the post of learning objectives : Write a comment on the post of Learning objectives.In order to plan an educational activity, clear and measurable learning objectives must be set in place to begin. Learning objectives are created using set of action verbs that clearly define what ..
Show the layers of the tcp/ip protocol suite : Using the internet in Figure 1.11 (Chapter 1) in the text, show the layers of the TCP/IP protocol suite and the flow of data when two hosts, one on the west coast and the other on the east coast, exchange messages.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the approximate real rate of interest

Treasury bills are currently paying 6 percent and the inflation rate is 3.4 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact r..

  How many hours should the firm hire karen per day

Karen is a trusted employee whose productivity declines as she works more and more hours each day. After careful observation of her work performance, her manager prepared the following chart. Karen's total cost to the firm is $11 per hour. Each work ..

  Compute the annual financing cost of a loan

Determine the annual financing cost of a loan under this arrangement if Odessa borrows the following amounts $300,000 and $250,000.

  What is the maximum capital budget-expected net income

ABC telecom in is expected to generate $240 million in net income over the next year. ABC Telecom INC stockholders expect it to maintain its long run dividend payout ratio of 40% earnings. If the company wants to maintain its current capital structur..

  The present value of the generated cash flows

Your company will generate $50,500 in cash flow each year for the next eleven years from a new information database. The computer system needed to set up the database costs $282,000. Assume you can borrow the money to buy the computer system at 8.50 ..

  How much does the NPV change if you change the bid price

Your company has been approached to bid on a contract to sell 4,200 voice recognition (VR) computer keyboards per year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. What is th..

  Inventory conversion period and payables deferral period

Both the inventory conversion period and payables deferral period use the average daily COGS in their denominators, whereas the average collection period uses average daily sales in its denominator. Why do these measures use different inputs?

  What actual return venture capital gets

What percentage of post IPO equity should Venture Capital's shares to be converted in to provide Venture Capital its expected return?

  Find the intrinsic value of a share of stock

Find the intrinsic value of a share of stock XYZ using the two-stage dividend discount model. The data for the valuation model has been obtained from the Value Line Research Center. Because the report contains data from the end of 2014, we will use t..

  Opportunity cost approach

If the defender can be sold for $80,000 today but you decide to keep the defender, what is the proper treatment of the $80,000 using the opportunity cost approach? Explain how Opportunity cost is used when evaluating projects using the opportunity co..

  What is nicos realized total rate of return

Nico bought 500 shares of a stock for $24.00 per share on January 1, 2013. He received a dividend of $2.50 per share at the end of 2013 and $4.00 per share at the end of 2014. At the end of 2015, Nico collected a dividend of $3.00 per share and sold ..

  Retirement fund-what is the maximum annual withdrawal

Bob Jenkins wishes to have $800,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump-sum deposit today. If upon retirement in 20 years, Bob plans to invest $800,000 in a fund that earns 4%, what is the..

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