How much must he save during each of the next 10 years

Assignment Help Financial Management
Reference no: EM131175461

John Adams is the CEO of a nursing home in San Jose. He is now 50 years old and plans to retire in 10 years. He expects to live for 25 years after he retires, that is, until he is 85. 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 today, and he will then get 24 additional annual payments. Inflation is expected to be 5 percent per year for 10 years (ignore inflation after John retires); he currently has $100,000 saved up, and he expects to earn a return on his savings of 8 percent 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?

(Hint: the inflation rate 5 % per year is used only to calculate desired retirement income.) Excel spreadsheet.

Reference no: EM131175461

Questions Cloud

How fast will the mortgage be paid off : If Ashley chooses to pays an additional $85 with each monthly mortgage payment, how fast will the mortgage be paid off?
What impact cultural belief have on multicultural counseling : What impact do cultural beliefs have on multicultural counseling? How can different cultural beliefs influence treatment interventions?
Identify an alcohol or other drug health promotion campaign : Identify an alcohol or other drug health promotion campaign or TV add. There are many linked on You Tube such as: Be the Influence and Australian Alcohol Conditioning advert
Discuss the importance of culture and ethnicity : Discuss the importance of culture and ethnicity in the development of the self-concept. Share your ideas of ways that the new parents can create opportunities for the child to learn about his or her culture.
How much must he save during each of the next 10 years : 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?
Prepare a list of uncertainties that the ceo faces : Prepare a list of uncertainties that the CEO faces if she buys the hotel. Prepare a list of uncertainties the CEO faces if she replaces the heart monitors. Which scenario appears to have a greater degree of uncertainty? Why?
Analyze strengths and weaknesses of company : Analyze the strengths and weaknesses of the company using ratio analysis, -  and present your findings in a paper .
Compare the insights into socialization provided : Utilizing information provided by your text, compare the insights into socialization provided by Charles Horton Cooley, George Herbert Mead, and Jean Piaget, in order to decide which theorist gives us the most useful insights into the development ..
Answer the following question for the given case : As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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