How much must you accumulate by the time you reach age 45

Assignment Help Financial Management

Reference no: EM131338898

You are currently 30 years of age. You intend to retire at age 60 and you want to be able to receive a 20-year, $100,000 beginning-of-year annuity with the first payment to be received on your 60th birthday. You would like to save enough money over the next 15 years to achieve your objective; that is, you want to accumulate the necessary funds by your 45th birthday.

a. If you expect your investments to earn 12 percent per year over the next 15 years and 10 percent per year thereafter, how much must you accumulate by the time you reach age 45?

b. What equal, annual amount must you save at the end of each of the next 15 years to achieve your objective, assuming that you currently have $10,000 available to meet your goal? Assume the conditions stated in Part a.

Reference no: EM131338898

Questions Cloud

Develop an app that provide support for decision making : Develop a Microsoft Excel application that provides support for decision making. The application must be useful to someone, which means it needs to help someone analyze data and make appropriate decisions based on the data. Don't waste your time ..

Analysis of competitors and customers : Define the type of market in which your selected product will compete, along with an analysis of competitors and customers. Analyze any comparative advantages and international trade opportunities.

What is its average distance from the sun : If it takes Mars 687 days to orbit the sun, what is its average distance from the sun?

Calculate the level of velocity for year : Calculate the level of velocity for each year. At what rate is velocity growing? Why does Bank Capital Exist? Why did brokered deposits during the S&L crisis cause interest rates to rise?

How much must you accumulate by the time you reach age 45 : If you expect your investments to earn 12 percent per year over the next 15 years and 10 percent per year thereafter, how much must you accumulate by the time you reach age 45?

What will be balance in account at close of business : Assuming a 7 percent annual compound interest rate, what will be the balance in the account at the close of business on July 1, 2014?

Find the speed of a car that skids 25 feet : The coefficient of friction varies with road conditions. Suppose the coefficient of friction is 0.6.

Calculate the level of price : Calculate the level of price, output and the amount supplied by each firm that arise inthe equilibrium. Provide a labeled diagram.

Build a web page on the topic of your choice with : Build (by hand code -- no automatic page generators allowed) a web page on the topic of your choice with:1. List,2. Table,3. Working hyperlink,4. an image,5. Something unusual, interesting, or unique (an HTML element or CSS feature NOT covered in cla..

User Account

All Pages