A# man# is# planning# to# retire# in# 20# years.# He# can# deposit# money# for# his# retirement# at# 8%# compounded# monthly.# It# is# estimated# that# the# future# general# inflation# (!)# rate# will# be# 3%# compounded#monthly.#What#deposit,#in# terms#of#constant#dollars, must#be#made#each#month#until# the#man#retires#so#that#he#can#make#annual#withdrawals#of#$20,000,#in#terms#of#actual dollars,#over# the#15#years#following#his#retirement?#(Assume#that#his#first#withdrawal#occurs#at#the#end#of#the#first# year after#his#retirement.)
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A# man# is# planning# to# retire# in# 20# years.# He# can# deposit# money# for# his# retirement# at# 8%# compounded# monthly.# It# is# estimated# that# the# future# general# inflation# (!)# rate# will# be# 3%# compounded#monthly.#What#deposit,#in# terms#of#constant#dollars, must#be#made#each#month#until# the#man#retires#so#that#he#can#make#annual#withdrawals#of#$20,000,#in#terms#of#actual dollars,#over# the#15#years#following#his#retirement?#(Assume#that#his#first#withdrawal#occurs#at#the#end#of#the#first# year after#his#retirement.)
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- . The rate of ______ is the ______ paid for using someone else’s ______, which is a _____ to consumers for earlier availability of durable goods such as cars, and a ______ to suppliers for capital investments nominal interest; money; cost; price; cost nominal interest; price; money; cost; cost real interest; price; money; cost; cost real interest; money; cost; price; costAbhijit deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Abhijit withdraws his $105. If inflation was 7 percent during the year the money was deposited, then Abhijit’s purchasing power has increased by 2 percent. Select one: True FalseConsider a 3.5 percent TIPS with an issue CPI reference of 185.6. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 193.5. For the interest payment in the middle of the year, the CPI was 195.1. Now, at the end of the year, the CPI is 199.6 and the interest payment has been made.What is the total return of the TIPS in dollars? What is the total return of the TIPS in percentage?
- True or False: Suppose your return on retirement account is 8%, and inflation rate is 9%, then you are stillearning more.”You and your spouse just adopted twin girls, little Heather and Beth. You want to make sure they are taken care of for the next 22 years. (A)Based on the following information, how much life insurance needs to be purchased for the husband using the income approach, if any? (B) How much, if any, needs to be purchased for the wife using the income approach? Assume 3% inflation rate. Market Labor Value Household Production Value Husband $72,000 $15,000 Wife $15,000 $40,000You earn a nominal return of 6% on your savings and the tax rate is 20%. If the rate of inflation is 2%, what are the before-tax real interest rate and your after-tax rate of return? please write down the solution precisely ( especially after-tax rate of return)
- You are just retired, You pension company promised you that they will pay you $25,000 a year for 30 years. The first payment you will receive is a year from now. The market interest rate is 5% per year. a) What is the present value of you pension if the payment you receive will be the same for 30 years? b) What is the present value of your pension if the payment you receive will grow 3% per year to combat inflation?Please do both question Question 1 Simple Interest of $234.3 is owed on a loan of $575 after four years and four months. What is the annual inerest rate? {Enter the value of the interest rate below and round your answer to one decimal point eg. X.X} Question 2 If you put $800 in a bank today that pays (a) 8% interest per year, how much money could be withdrawn 17 years from now? (Round your answer to the nearest dollar) $ (b) 8% simple interest per year, how much money could be withdrawn 17 years from now? (Round your answer to the nearest dollar) $- A man borrows 10,000 from a friend and pledges to pay it back in 92 days at an interest rate of 8.5% simple. What is the minimum amount required? - Calculate the interest on 6,800.10 over three years at a rate of 11.01% simple interest. 3 decimal places please Asap
- 1. What is the relationship between the time value of money and inflation? 2. Compare simple interest to compound interest. 3. What are the advantages and disadvantages of a fixed principal, fixed interest loan? 4. What is the purpose of a bridge loan? 5. Distinguish between bank discount and simple interest.6. Differentiate between a stated rate of interest and an effective rate of interest. 7. What is the significance of finding the internal rate of return (IRR)? 8. Jill Kramer borrowed $25,000 to pay for a startup business. Jill must repay the loan at the end of five months in one payment with a 6 percent simple interest rate.What is the total amount that Jill must repay in five months?How much interest does Jill repay?9. Joe Jones went to his bank to find out how long it will take for $1,000 to amount to $1,350 at 9 percent simple interest. Solve Joe's problem.The__________________ is the nominal interest rate minus the rate of inflation. a)annualized interest rate b)nominally adjusted c)real interest rate d)real GDPParker is 50 and wants to retire in 15 years. His family has a history of living well into their 90s. Therefore, he estimates that he will live to age 95. He currently has a salary of $120,000 and expects that he will need about 65% of that amount annually at the beginning of each year if he were retired. He can earn 9 percent in his portfolio while he is working. However, he expects that he will only earn 7 percent in his portfolio during retirement. He expects inflation to continue at 3 percent. Parker currently has $350,000 invested for his retirement. His Social Security benefit in today’s dollars is $30,000 per year at normal age retirement of age 67. His Social Security benefit will be reduced by 6 2/3 percent for each year he begins collecting before full age retirement. How much does he need to save at the end of each ear to meet his retirement goals (assume he does not wish to leave a financial legacy)?