Review problem on future value of annuity

Assignment Help Finance Basics

Reference no: EM131977649

Question: Future value of annuity

Your client is 36 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $12,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average return of 9% in the future.

a. If she follows your advice, how much money will she have at 65? Round your answer to the nearest cent.

b. How much will she have at 70? Round your answer to the nearest cent.

c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Round your answers to the nearest cent.

Anual withdrawls if she retires at age 65 - $?

Anual withdrawals if she retires at age 70 - $?

Reference no: EM131977649

Questions Cloud

Intervention is function of monetary policy-fiscal policy : The intervention is a function of monetary policy (MP), fiscal policy (FP) or the Bank of Canada acting as a fiscal agent (FA)

Finding the pretax required return on gordon stock : The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies.

Determine the expected level of sales for next year : Gary's Pipe and Steel company expects sales next year to be $920,000 if the economy is strong, $660,000 if the economy is steady, and $377,000.

What is the future value of an ordinary annuity : What is the future value of an ordinary annuity at the end of 25 years if $200 is deposited each month into an account earning 6% annual interest compounded.

Review problem on future value of annuity : Your client is 36 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $12,000 per year.

Which projects should firm implement based on your analysis : Which projects should the firm implement based on your analysis of both techniques and given the capital rationing amount? Write an email to your boss.

Draw the cash flow diagram to be used in solving : The future worth in year 10 of a geometric gradient series of cash flows was found to be $80,000. Assume that interest rate was 13% per year.

What is fv in the given equation : Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon.

What is the future value of given annuity payment : What is the future value of a $900 annuity payment over five years if interest rates are 8 percent? (Do not round intermediate calculations).

User Account

All Pages