A) How much should you deposit at the end of each month into an investment account that pays 8.5% compounded monthly to have $1 million when you retire in 35 years. B) How much of that $1 million comes from interest. C) If you anticipate living for 20 years on your retirement savings, how much will you be able to withdraw each month if the account continues to pay 8.5% compounded monthly.

Question

A) How much should you deposit at the end of each month into an investment account that pays 8.5% compounded monthly to have $1 million when you retire in 35 years.

B) How much of that $1 million comes from interest.

C) If you anticipate living for 20 years on your retirement savings, how much will you be able to withdraw each month if the account continues to pay 8.5% compounded monthly.

Please answer all 3 parts and show work. this is my 4th time asking

 

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Future value and Present value

Time Value

Related Finance Q&A

Find answers to questions asked by students like you.

Q: If you are willing to pay RM1,077 for a 15-year RM1,000 par value bond that pays 9 percent interest ...

A: A financial instrument with a fixed cost that helps a company to raise funds for business operations...

Q: 11.A loan of R1.75 million was made to a farmer, bonded against fixed property at an interest rate o...

A: Interest is the amount paid by the borrower of money to the lender of money. It is usually the % of ...

Q: If you invest $5,123 in a long-term venture, you will receive $1,110 per year forever. Assuming your...

A: Formula to calculate the capitalized worth of investment is: CW = A/i where CW is the capitalized wo...

Q: Perform a present worth analysis of equal-service machines that have the costs shown on the next pag...

A: Present worth analysis - it mean present value of total present and future outflow & inflow . wh...

Q: You have a financial goal to reach: $1,000,000 when you retire. You are currently 20 years old and y...

A: Given: Future value (FV) = $ 1000000 Number of periods (n) = 60-20 = 40 Return (r) = 0.15

Q: The owner of a small furniture manufacturer is retiring and is interested in selling the business to...

A: The employees can get finance from different sources, Some sources are- Loans from bank More partne...

Q: You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company he...

A: Cash flows statement The financial statement which is helpful in reflecting on how changes in the ba...

Q: The distinction between “pure risk” and “speculative risk” is important because only pure risks are ...

A: “Fundamental risks” are those risks which affect a large segment of companies. But the risks which a...

Q: Why do noninvestment-grade bonds have much higher direct costs than investment-grade issues?

A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations a...

Q: Explain why an individual might not be convinced to make a buy/sell decision based on the Gordon gro...

A: Gordon growth model or Constant growth model is a kind of stock valuation technique which helps in d...

Q: Under normal conditions (60% probability), Plan A will produce a $31,000 higher return than Plan B. ...

A: Using the provided information, the table is: Plan Probability Return A 0.60 31000 B 0.40 -11...

Q: Mark Decker has identified four stocks for his portfolio, and he wants to determine the percentage o...

A: Proportion of Investment in the following stocks are: Internet  = 0% Software  = 0% Computer = 60% E...

Q: G and H are mutually exclusive events. P (G) = 0.5   P (H) = 0.3   P( H | G) = 0.6   Find P (H OR G...

A: Given: P(G) =0.5,P(H)=0.3,P(H|G)=0.6 The events are mutually exclusive events.

Q: ⦁ The reason that depreciation is a source of cash inflow is because A.  it is a tax-deductible non-...

A: Any fixed asset purchased has a fixed life throughout which it has to be used. Over the course of it...

Q: How much should you deposit into an account that pays 3.6% compounded monthly if you want to have $1...

A: The time value of money implies that the cash in hand at present has a higher value than the cash re...

Q: Twins Natalie and Kaitlyn are both age 27. They both live in Warren, Ohio. Beginning at age 27, Nata...

A: Computation:

Q: What is the investment cost of Alternative 2 that will cause it to breakeven with Alternative 1, ass...

A: Capital Budgeting decisions are related to selection of best long-term investment alternatives among...

Q: An amount of R50000 is invested in a project that predicts the quarterly cash flow return over the n...

A: Internal Rate of Return(IRR) is rate at which NPV is zero or IRR is rate at which discounted value a...

Q: Finance Question

A: With the use of mortgage calculator, the calculation of equal yearly payments is as under:   Loan am...

Q: You are a young personal financial adviser. Molly, one of your clients approached you for consultati...

A: Monthly payment The minimum amount required to be paid monthly by the person in an account. FV The a...

Q: When is it appropriate to bring a statutory derivative action (s 236)? Draw a flowchart for the step...

A: If any individual shareholder believes that in case a top management official is involved in corpora...

Q: A 13 percent semi-annual coupon bond has 10 years to maturity and face value of tk. 1000, the rate o...

A: FV = 1000 coupon = 13% semiannual = 13/2% each period = 1000*13/2 = 65 each period time n = 10 = 10*...

Q: 19.    You are able to choose between two retirement policies described below.          Policy A: St...

A: Annuity PV  Policy 1 This is for 10 years at 6% for 10 years 35 years from now =10000*(1-(1/(1+.06)^...

Q: Explain how pure risk has an adverse effect on the economy?

A: Pure risk is one of the major type of risk which is beyond the control and can affects the economy a...

Q: What are hedge funds?

A: Hedge fund : In simple words, an investment fund trading in liquid assets to make active returns is ...

Q: Explain the difference between risk and ambiguity. How might decision making differ for a risky vers...

A: The term risk would refer to harm or loss. Whereas ambiguity is a situation where there can be more ...

Q: Percentages need to be entered in decimal format, for instance 3% would be entered as .03. Ybor City...

A: “Since you have posted a question with multiple subparts, we will solve first three subparts for you...

Q: The CAD/USD exchange rate at the beginning of the year 2015 is 1.9235. The interest rates in the yea...

A: Purchasing Power Parity : it is a theory to calculate forward currency exchange rate between two cur...

Q: Bond Z is noncallable and has 20 years to maturity, a 7% annual coupon, and a $1,000 par value. Your...

A: The value of bond today is calculated by sum of present value of interest paid till maturity and pre...

Q: Acme Manufacturing makes their preliminary economic studies using a before-tax MARR of 18%. More det...

A: Post-tax MARR can be calculated from Pre-tax MARR by multiplying it by (1-t)  

Q: Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $8 billion in...

A: (1) It is assumed that face value of share is $ 10 Total Assets = 8 billions common equity  = 8 bill...

Q: Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment. E...

A: Profitability index(PI) is the relationship between the present value of cash inflows and the presen...

Q: 13. An asset which cost $100,000 is being depreciated under MACRS using a 10-year normal recovery pe...

A: MACRS: MACRS stands for Modified accelerated cost recovery system. MACRS depreciation table:

Q: 18. Jenson is 30 years old and plans to retire at age 65. Although he will receive retirement benefi...

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two type...

Q: Bhavika Investments, a group of financial advi-sors and retirement planners, has been requested to p...

A: Since there is more than one question in just one part it is only possible to solve the first questi...

Q: Twins graduate from college together and start their careers. Twin 1 invests $1500 at the end of eac...

A: First we will calculate future value of twin 1 and then use it to calculate annual savings for twin ...

Q: The Ford Motor Company has redesigned its best selling truck by substituting aluminum for steel in m...

A: MARR stands for Marginal accepted rate of return. it is then minimum required rate of return which i...

Q: Blooming Ltd. currently has the following capital structure: Debt: $2,500,000 par value of outstandi...

A: 1) Computation of current market value and capital structure of the firm and weights of equity fundi...

Q: d) You expect to make 12 semi-annual payments of $ 5,000 each at the rate of return of 5% capitalize...

A: The effective annual rate of return is the actual annual rate of return an investment will generate ...

Q: Paul Restaurant is considering the purchase of a RM9,300 soufflé maker. The soufflé makerhas an econ...

A: NPV stands for net present value. It is the value which will be generated from the project. Calculat...

Q: Find the present value of the decreasing annuity necessary to fund a withdrawal of $100 per month fo...

A: The question gives the following information:

Q: Weston Corporation just paid a dividend of $1.25 a share (i.e., D0 = $1.25). The dividend is expecte...

A: Dividend is proportion of earnings of company which are distributed to shareholders as per their hol...

Q: A hedge fund adopts the 2/20 regime for managers' compensation. It also adopts the T-bill return as ...

A: In hedge funds, the 2/20 regime is the compensation structure of hedge fund managers which consists ...

Q: WACC Lancaster Engineering Inc. (LEI) has the following capital structure, which itconsiders to be o...

A: a) Cost of equity is the cost of raising funds from the equity market. It is calculated as  Cost of ...

Q: You have a $50,000 portfolio consisting of Intel, GE and Con Edison. You put $20,000 in Intel, $12,0...

A: Portfolio Beta : portfolio beta means average beta of all the securities covered in the portfolio . ...