A couple just got married and they both are 25 and plan to retire at 65, in 40 years. They want 200k at the end of each year in 20 years upon retirement. Currently they have 2k cash and expect 100k as a retirement bonus at the end of the 40 years from employer. Assume interest rate is 8%. What is the present value off at 65 of the annual payment of 200k at the end of 20 years? What’s the present value today when 25 of the annual payment of 200k. What’s the present value today of 2k of cash they have and the 100k bonus? What’s the present value today of the amount they need to save up to reach their goal for retirement? How much must they save at the end of each year for the next 40 years to reach their goal?
A couple just got married and they both are 25 and plan to retire at 65, in 40 years. They want 200k at the end of each year in 20 years upon retirement. Currently they have 2k cash and expect 100k as a retirement bonus at the end of the 40 years from employer. Assume interest rate is 8%. What is the present value off at 65 of the annual payment of 200k at the end of 20 years? What’s the present value today when 25 of the annual payment of 200k. What’s the present value today of 2k of cash they have and the 100k bonus? What’s the present value today of the amount they need to save up to reach their goal for retirement? How much must they save at the end of each year for the next 40 years to reach their goal?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 23P
Related questions
Question
A couple just got married and they both are 25 and plan to retire at 65, in 40 years. They want 200k at the end of each year in 20 years upon retirement. Currently they have 2k cash and expect 100k as a retirement bonus at the end of the 40 years from employer. Assume interest rate is 8%. What is the present value off at 65 of the annual payment of 200k at the end of 20 years? What’s the present value today when 25 of the annual payment of 200k. What’s the present value today of 2k of cash they have and the 100k bonus? What’s the present value today of the amount they need to save up to reach their goal for retirement? How much must they save at the end of each year for the next 40 years to reach their goal?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 6 steps with 5 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
