A 65 year old employee retires from her employer with annual retirement payment received once per...
A 65 year old employee retires from her employer with annual retirement payment received once per year of $60,000. Her remaining life expectancy is 15 years, and she has no surviving spouse
At a 4% discount rate, based on the risk of her employer paying her pension and the rate of similar risk investments, what is the lump-sum value of her pension at the time of her retirement?
The present value of annuity factor for n=15 and r=4% is 11.1184.
Homework Answers
Retiree will get $60000 per year for next 15 years,
discount rate d = 4%
So, present value of this annuity using ordinary annuity formula is
PV = A*(1 - (1+d)^-t)/d = 60000*(1 - 1.04^-15)/0.04 = $667103.25
Or using present value of annuity factor for n=15 and r=4% is 11.1184 PV = 60000*11.1184 = $667104
Add Answer to:
A 65 year old employee retires from her employer with annual
retirement payment received once per...
Judy has recently begun an annual investment in her employer-sponsored retirement plan, investing $4,848 per year....
Judy has recently begun an annual investment in her employer-sponsored retirement plan, investing $4,848 per year. Judy believes that another benefit of investing the extra $4,848 in her employer-sponsored retirement plan is the tax savings. Judy is in a 25% marginal tax bracket. How much will investing in this manner save her in taxes annually? Assuming she remains in a 25% marginal tax bracket until she retires, how much will it save her in total over the next 10 years,...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to:...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to: 1.2% × Service years × Final year’s salary Stanley Mills was hired by Clark at the beginning of 2002. Mills is expected to retire at the end of 2046 after 45 years of service. His retirement is expected to span 15 years. At the end of 2021, 20 years after being hired, his salary is $87,000. The company’s actuary projects Mills’s salary to be...
Problem 4-51 (Algorithmic) (LO. 4) Pam retires after 28 years of service with her employer. She...
Problem 4-51 (Algorithmic) (LO. 4) Pam retires after 28 years of service with her employer. She is 66 years old and has contributed $31,500 to her employer's qualified pension fund, all of which was taxable when earned. She elects to receive her retirement benefits as an annuity of $3,150 per month for the remainder of her life. Click here to access Exhibit 4.1 and Exhibit 4.2. a. Assume that Pam retired in June 2019 and collected six annuity payments that...
This is a classic retirement problem. A friend is celebrating her birthday and wants to start...
This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account...
Question 6: This is a classic retirement problem. A friend is celebrating her birthday and wants...
Question 6: This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7%...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7% x Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 1999. Mills is expected to retire at the end of 2043 after 45 years of service. His retirement is expected to span 15 years. At the end of 2018, 20 years after being hired, his salary is $85,000. The company's actuary projects Mills's salary to be $320,000 at...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7%...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7% x Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 1999. Mills is expected to retire at the end of 2043 after 45 years of service. His retirement is expected to span 15 years. At the end of 2018, 20 years after being hired, his salary is $85,000. The company's actuary projects Mills's salary to be $320,000 at...
18. 65-year old John Smith retired in January 2020. He received N$ 200 000 lump sum...
18. 65-year old John Smith retired in January 2020. He received N$ 200 000 lump sum from his employer. Some of his receipts for the year also included N$ 8 000 withdrawal benefit from a pension fund, N$ 300 000 retirement benefit from a provident fund and N$ 2 000 war pension. After retirement, John continued running the business that he had started a few years ago. During the year, the business earned N$ 90 000 in profits. Which one...
P1.1 (similar to) Question Help Stefani German, a 40-year-old woman, plans to retire at age 65,...
P1.1 (similar to) Question Help Stefani German, a 40-year-old woman, plans to retire at age 65, and she wants to accumulate $490,000 over the next 25 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 5% by investing in a low-risk portfolio containing about 20% short-term securities, 30% common stock, and 50% bonds Stefani currently has $38,389 that at an annual rate...
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require...
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. Year 1 Year 2 Year 3 Year 4 Investment X Investment y $ 3,000 $ 6,000 4,000 5,000 5,000 4.000 6,000 3,000 Total $ 18,000 $18,000 Click here to view Exhibit 11B-1, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment using a 10% discount rate. (Round discount factor(s)...
Problem 4-51 (Algorithmic) (LO. 4) Pam retires after 28 years of service with her employer. She is 66 years old and has contributed $31,500 to her employer's qualified pension fund, all of which was taxable when earned. She elects to receive her retirement benefits as an annuity of $3,150 per month for the remainder of her life. Click here to access Exhibit 4.1 and Exhibit 4.2. a. Assume that Pam retired in June 2019 and collected six annuity payments that...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7% x Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 1999. Mills is expected to retire at the end of 2043 after 45 years of service. His retirement is expected to span 15 years. At the end of 2018, 20 years after being hired, his salary is $85,000. The company's actuary projects Mills's salary to be $320,000 at...
Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to: 1.7% x Service years Final year's salary Stanley Mills was hired by Clark at the beginning of 1999. Mills is expected to retire at the end of 2043 after 45 years of service. His retirement is expected to span 15 years. At the end of 2018, 20 years after being hired, his salary is $85,000. The company's actuary projects Mills's salary to be $320,000 at...
P1.1 (similar to) Question Help Stefani German, a 40-year-old woman, plans to retire at age 65, and she wants to accumulate $490,000 over the next 25 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 5% by investing in a low-risk portfolio containing about 20% short-term securities, 30% common stock, and 50% bonds Stefani currently has $38,389 that at an annual rate...
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. Year 1 Year 2 Year 3 Year 4 Investment X Investment y $ 3,000 $ 6,000 4,000 5,000 5,000 4.000 6,000 3,000 Total $ 18,000 $18,000 Click here to view Exhibit 11B-1, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment using a 10% discount rate. (Round discount factor(s)...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago