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You are planning for retirement and have the following information.
You expect inflation during your working years to be 4% on average.
You predict that you will be able to earn an average of 10% per year on your invested funds during the entire planning horizon.
1) The current salary you earn is $50000 and you want to be able to have the same purchasing power for each year of your retirement. How much will you need for each year of retirement If you plan to retire 30 years from now?
2) If you plan to be in retirement for 20 years and want the income determined in question 1, what is the amount that must be in your retirement account when you retire?
3) How much would you need to invest each year during your working years to have the amount from question 2 in your account when you retire?
4) Now a more realistic scenario. How much would you need to invest each month during your working years to have the amount from question 2 in your account when you retire?
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Zellars, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate incomes of $48,000 at the end of year one and $45,000 at the end of year two. Project B costs $80,000 and is expected to genera..
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When using a portfolio rate, what would cause the portfolio interest rate on a UL to perform better than the market in an extended declining interest rate market and yet would perform worse than the market in an extended increasing interest rate envi..
You are a risk-averse investor who is considering investing in one of two economies. The expected return and volatility of all stocks in both economies is the same. In the first economy, all stocks move together in good times all prices rise together..
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