At age 25, you start work for a company and are offered two retirement options.Retirement option 1: When you retire, you will receive a lump sum of $30,000 for each year of service.At age 59, option 1 will provide a retirement benefit of what amount?esc$At age 59, option 2 will provide a retirement benefit of what amount? Round your answer to the nearest whole dollar.$Retirement option 2: When you start to work, the company deposits $15,000 into an account with an APR of 12% compounded monthly. When you retire, you getthe balance of the account.Which option is better if you retire at age 59?O retirement option 1retirement option 2At age 69, option 1 will provide a retirement benefit of what amount?$At age 69, option 2 will provide a retirement benefit of what amount? Round your answer to the nearest whole dollar.$Which option is better if you retire at age 69?retirement option 1O retirement option 2DF1F2ㅁㅁ 13F35F4JULDDŹ BOF5♫MacBook AirF68F7tv NA▶11F8QUANT REASONING(105A-900), Sum...F9NDWF10F11F12

Compound Interest: It is the interest earned on interest. It is calculated depend on initial…

Answered: At age 25, you start work for a company…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 32P

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A man who is 30 years old at the start of the year, is considering getting an MFM degree. He currently earns $40,000 per year and expects to continue earning that amount for the rest of his working life (until age 65). He will give up his income for two years and will pay $20,000 per year in tuition, if he attends business school. In exchange, he expects a raise in his salary after completing his MFM. Assume that the post-graduation salary grows at a 5% annual rate and that the discount rate is 8%. What is the minimum expected starting salary after graduation for him that makes attending business school a positive-NPV investment? (Assuming that all cash flows happen at the end of each year.) Use Time Value of Money calculations.
Suppose you have two job offers to consider for similar positions. Company A will pay a salary of $85,000 per year and offers the most common retirement plan 401(k) match, which is 50 cents for each dollar you contribute on up to 6% of your pay. Company B will pay a salary of $75,000 per year and offers a dollar-for-dollar match on up to 10% of your pay. Assume you spend 10 years working at the company, that salary and retirement contributions all occur monthly, and the average APR is 7%. 1. What are the balances on these two account options? Include both your contribution and the employers. 2. Explain which option you would take. NEED BOTH PARTS
Many companies offer retirement plans wherein the company matches the contributions made by the employee up to 6% of the employee’s salary. An engineer planning for her retirement expects to invest the maximum of 6% each year. Her salary in year one is $60,000 and is expected to increase by 4% each year. Including the employer’s contributions, how much will she have in her account at the end of 20 years if interest accrues at 7% per year?
retirement options: at age 25, you start work for a company and are offered two retirement options. Retirement option 1: when you retire, you will receive a lump sum of $30,000 for each year of service. Retirement option 2: when you start to work, the company deposits $15,000 into an account that pays a monthly interest rate of 1%, and interest is compounded monthly. When you retire, you get the balance of the account. Which option is better if you retire at age 65? Which option is better if you retire at age 55?
Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%, what is the present value of your retirement savings? please answer fast i give upvote
Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $41,000 and you expect your salary to increase at a rate of 4% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%.The future value (FV) at retirement (age 65) of your savings is closest to ________.
A 45-year-old engineer earning $120,000 per year wants to retire at age 65 with $2 million. The engineer has nothing saved and expects to earn 7% annually on the investment? (a) How much money must be invested each year? (b) If the employer does a 100% match of retirement savings up to 4% of the employee’s salary, how much money must each invest annually?
A self-employed person deposits $3,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 8 percent. How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 40?
Your employer contributes $50 a week to your retirement plan. Assume that you work for your employer for another thirty years and that the applicable discount rate is 9 percent. Given these assumptions, what is this employee benefit worth to you in 30 years?
. At age 30, Sam earns his CPA and accepts a position in an accounting firm.Sam plans to retire at the age of 66, having received an annual salary of$150,000. Assume an interest rate of 4%, compounded continuously. What isthe accumulated future value of his position? ( ?=R/K (e^kt-1) where R is theincome stream, k is the rate, and T is the number of years.)

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