Homework Answers
The amount is computed as shown below:
Present value = Annual income x [ (1 – 1 / (1 + r)n) / r ]
r is computed as follows:
= 12% / 2 (Since the interest is compounded semi annually, hence divided by 2)
= 6% or 0.06
n is computed as follows:
= 20 x 2 (Since the interest is compounded semi annually, hence multiplied by 2)
= 40
So, the amount will be as follows:
= $ 90,000 x [ (1 - 1 / (1 + 0.06)40 ) / 0.06 ]
= $ 90,000 x 15.04629687
= $ 1,354,166.718
Feel free to ask in case of any query relating to this question
Add Answer to:
Your mom has reached retirement age and received a lump sum from NIB under the Special...
Rita just hit a modest lottery jackpot and wants to invest a lump sum so that...
Rita just hit a modest lottery jackpot and wants to invest a lump sum so that she can receive $4,200 each year for the next 15 years so that she can play the lottery then to fund the rest of her retirement. How much of her recent windfall must Rita invest today at 5%, compounded annually for the next 15 years so that she can live the Lotto-life for those 15 years?
You are assisting your client, Selena Hermione with her retirement planning Selena would like to have...
You are assisting your client, Selena Hermione with her retirement planning Selena would like to have retirement income of 85% of her current salary of $120,000 Selena is currently 30 years from retirement and is planning for 20 years in retirement She currently has a retirement fund of $250,000 You are allowing fo inflation of 2.5% annually and expect to earn an 8% after-tax return Please work through the questions below determine how much Selena should save annually toward retirement....
Julie has just retired. Her company's retirement program has two options as to how retirement benefits...
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $130,000 immediately as her full retirement benefit. Under the second option, she would receive $19,000 each year for 5 years plus a lump-sum payment of $75,000 at the end of the 5-year period. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factors) using tables....
Imagine you are 25 years old right now. You would like to retire in 40 years...
Imagine you are 25 years old right now. You would like to retire in 40 years (at age 65). You would like to fund your retirement. You would like to have enough saving to withdraw $50,000 each year in retirement and you want to plan for 20 hears (the last withdrawal is at age 85). You will earn 7% annually on your saving before you retire. Then once you retire, you will move your nest egg into a safer investment,...
27. Carrie retired last week and received a lump sum distribution of her employer's stock from...
27. Carrie retired last week and received a lump sum distribution of her employer's stock from the company's stock bonus plan. The value of the shares at the time of contribution varied. The 1st contribution was 2,500 shares at $10 per share. The 2nd consisted of 2,500 shares at $13 per share, and the last 2,500 shares were valued at $15 per share. All stock was contributed by the emplover, and the current value of the stock on the date...
Juwan and Timi Clarke are planning for retirement. Juwan has a number of retirement related questions...
Juwan and Timi Clarke are planning for retirement. Juwan has a number of retirement related questions he needs help answering. Use your retirement planning knowledge to address the following questions. a.Juwan would like to withdraw $365,000 from retirement savings when he retires. Assuming he can earn a 6.0 percent annualized rate of return on retirement assets, and that inflation will average 2.0 percent during retirement, how much will he need on his first day of retirement to fund twenty-four yearly...
The Certainty Company (CC) operates in a world of certainty. It has just hired Matt (age...
The Certainty Company (CC) operates in a world of certainty. It has just hired Matt (age 20) who will retire at age 65, draw retirement benefits for 15 years, and die at age 80. Matt's salary is $20,000 per year, but wages are expected to increase at the 5% annual rate of inflation. CC has a defined benefit plan in which workers receive 1% of the final year's wage for each year employed. The retirement benefit, once started, does not...
Mpumi Madonsela has recently qualified to be a Chartered Management Accountant and she is working at...
Mpumi Madonsela has recently qualified to be a Chartered Management Accountant and she is working at one of the big four accounting firms. Due to the limited salary of an article clerk, Mpumi did not contribute to any provident fund. Fortunately for her, the firm contributed to a pension fund on her behalf. She was not content with only a pension fund but was adamant that she wanted a provident fund to supplement her very extravagant life style. Mpumi decided...
Austin Miller wishes to have $400,000 in a retirement fund 25 years from now. He can...
Austin Miller wishes to have $400,000 in a retirement fund 25 years from now. He can create the retirement fund by making a single lump-sum deposit today. Use next table to solve the following problems. If upon retirement in 25 years, Austin plans to invest $400,000 in a fund that earns 5%, what is the maximum annual withdrawal he can make over the following 20 years? Round the answer to the nearest cent. Round PVA-factor to three decimal places. Calculate...
James has heard that it is important to start saving for retirement at an early age....
James has heard that it is important to start saving for retirement at an early age. He deposits $1000 on each of his birthdays from age 16 through to age 25 inclusive into an account that pays 10% interest compounded annually. How much will be in his account immediately following his 25th birthday? If James leaves this amount in the account for 35 more years, without making any further deposits, how much will be in the account when he turns...
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $130,000 immediately as her full retirement benefit. Under the second option, she would receive $19,000 each year for 5 years plus a lump-sum payment of $75,000 at the end of the 5-year period. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factors) using tables....
27. Carrie retired last week and received a lump sum distribution of her employer's stock from the company's stock bonus plan. The value of the shares at the time of contribution varied. The 1st contribution was 2,500 shares at $10 per share. The 2nd consisted of 2,500 shares at $13 per share, and the last 2,500 shares were valued at $15 per share. All stock was contributed by the emplover, and the current value of the stock on the date...
The Certainty Company (CC) operates in a world of certainty. It has just hired Matt (age 20) who will retire at age 65, draw retirement benefits for 15 years, and die at age 80. Matt's salary is $20,000 per year, but wages are expected to increase at the 5% annual rate of inflation. CC has a defined benefit plan in which workers receive 1% of the final year's wage for each year employed. The retirement benefit, once started, does not...
James has heard that it is important to start saving for retirement at an early age. He deposits $1000 on each of his birthdays from age 16 through to age 25 inclusive into an account that pays 10% interest compounded annually. How much will be in his account immediately following his 25th birthday? If James leaves this amount in the account for 35 more years, without making any further deposits, how much will be in the account when he turns...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago