4:02SearchRetirement Strategy 1MATH-132-N421 Mathematical Literacy 2023SPAssume that you are 23 years old and startedsaving for retirement on January 1, 2023. Youplan to retire on December 31, 2067, when youare 68 years old. There are 45 years from thetime you started investing (saving) until you retire.You have no previous or other retirement savingswhen you start to save. Assume there are 365days and 52 weeks in each year from 2023 to2067. (Ignore leap years). Assume that taxes willnot affect any of the amounts or your savings.(You invest $75 at the end of each week into aretirement account paying 7.5% compoundedweekly from January 1, 2023, until you retire.Show all work and answer the followingquestions:1. Assuming no withdrawals or additionalpayments were made, how much money willbe in your retirement account after 45 years?2. Assuming you made all the weekly paymentsfor45 years, how much did you pay into yourretirement account?453. Assuming you made all the weekly paymentsfor 45 years, how much interest did you earnover the 45 years?Enter the amounts from this strategy in Row 1 of110NotificationsDashboa...000CalendarTo DoInbox

Calculate the final amount in the retirement account after 45 years To calculate the final amount…

Answered: Assume that you are 23 years old and…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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The table here shows the no-arbitrage prices of securities A and B that we calculated.Cash Flow in One YearSecurity Market Price Today Weak Economy Strong EconomySecurity A 231 0 600Security B 346 600 0a. What are the payoffs of a portfolio of one share of security A and one share of security B?b. What is the market price of this portfolio? What expected return will you earn from holdingthis portfolio?
When Russell had a certain amount of savings in a private insurance company for his retirement He is planning to retire. Russell's goal is $25,000/year in retirement to earn retirement income. Russell is still employed, $10 000 savings per year and has $5000 in his account. Russell deposits at 14% interest is invested in a fund. Russell is 20 years old and predicts he will die at 70, When he turns 70, he wants to spend all his savings and not have any money left. is planning. At what age should Russell retire?
An investor has decided to commit no more than $80,000 to the purchase of the common stocks of two companies, Company A and Company B. He has also estimated that there is a chance of at most a 1% capital loss on his investment in Company A and a chance of at most a 4% loss on his investment in Company B, and he has decided that these losses should not exceed $2000. On the other hand, he expects to make a(n) 15% profit from his investment in Company A and a(n) 18% profit from his investment in Company B. Determine how much he should invest in the stock of each company (x dollars in Company A and y dollars in Company B) in order to maximize his investment returns. What are the (x,y) values? What is the optimal profit?
An investor has decided to commit no more than $80,000 to the purchase of the common stocks of two companies, Company A and Company B. He has also estimated that there is a chance of at most a 1% capital loss on his investment in Company A and a chance of at most a 4% loss on his investment in Company B, and he has decided that these losses should not exceed $2000. On the other hand, he expects to make a(n) 15% profit from his investment in Company A and a(n) 18% profit from his investment in Company B. Determine how much he should invest in the stock of each company (x dollars in Company A and y dollars in Company B) in order to maximize his investment returns.(x, y)= What is the optimal profit?$
(ii) A state predicts that it will need $2.15 billion for construction of new roads and maintenance of existing roads in year 2025. It is forecast that 1.5 percent of the vehicle-fleet in that year will be electric vehicles with the remaining being gas powered vehicles. The population of the state is forecast to be 10 million persons in 2025 with the average number of vehicles owned per person being 0.75. It is projected that on average each vehicle will be driven 12,000 miles per year, with gas powered vehicles achieving an average gas consumption of 25 miles per gallon (mpg). If the state plans to raise 99 percent of the required revenue from gas powered vehicles and the remainder from electric vehicles, (a) Determine how much each gallon of gas sold should be taxed to achieve the revenue target (b) Determine what the annual flat tax for each electric vehicle should be to raise the appropriate revenue target; (c) If the state decides to raise the required revenue based on a tax per…
28. Suppose an investor has the opportunity to buy thefollowing contract (a stock call option) on March 1.The contract allows him to buy 100 shares of ABCstock at the end of March, April, or May at a guaranteed price of $50 per share. He can exercise thisoption at most once. For example, if he purchases the stock at the end of March, he cannot purchasemore in April or May at the guaranteed price. If theinvestor buys the contract, he is hoping that the stockprice will go up. The reasoning is that if he buys thecontract, the price goes up to $51, and he buys thestock (that is, he exercises his option) for $50, he canthen sell the stock for $51 and make a profit of $1per share. Of course, if the stock price goes down, hedoesn’t have to exercise his option; he can just throwthe contract away.Assume that the stock price change each monthis normally distributed with mean 0 and standarddeviation 2. The investor uses the following strategy. At the end of March, he exercises the optiononly if…
More than 50,000 state and local governments and their agencies borrow money by issuing municipal bonds to build, repair, or improve schools, streets, highways, hospitals, sewer systems, and so on. When the federal income tax law was adopted in 1913, interest on municipal bonds was excluded from federal taxation. As a result, municipal bond investors are willing to accept lower yields than those they can obtain from taxable bonds. As part of your portfolio, you are considering investing $70,000 in bonds. You have the choice of investing in tax-exempt municipal bonds yielding 2.75% or corporate bonds yielding 4% in taxable interest income. (a)What is the annual interest income (in $) and tax status of the municipal bond investment? (b)What is the annual interest income (in $) and tax status of the corporate bond investment? (c) If you are in the 32% marginal tax bracket for federal income taxes and your state and local taxes on that income amount to an additional…
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The following table lists several corporate bonds issued during a particular quarter. Company AT&T Bank ofAmerica GeneralElectric GoldmanSachs Verizon WellsFargo Time toMaturity(years) 10 10 2 3 8 7 AnnualRate (%) 3.40 3.00 6.25 5.15 5.15 2.50 Would Bank of America or Verizon pay the most total interest on a $3,000 bond at maturity? How much interest would that be? Bank of America would pay $ ____________ in interest on a $3,000 bond at maturity. Verizon would pay $_______ in interest on a $3,000 bond at maturity. So, we see Verizon would pay the most interest on $3,000 bond at maturity.
Three students have each saved $1000. Each has an investment opportunity in which he or she can invest up to $2000. Here are the rates of return on the students’ investment projects: Harry 5 percent Ron 8 percent Hermione 20 percent If borrowing and lending are prohibited, so each student can use only personal saving to finance his or her own investment project, how much will each student have a year later when the project pays its return? Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate r. What would determine whether a student would choose to be a borrower or lender in this market? Among these three students, what would be the quantity of loanable funds supplied and quantity demanded at an interest rate of 7 percent? At 10 percent? At what interest rate would the loanable funds market among these three students be in equilibrium? At this interest rate, which student(s)…

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