Homework Help is Here – Start Your Trial Now!
Business
Finance
Kevin and Jennifer are ready to retire. They want to receive the equivalent of $40,000 in today's dollars at the beginning of each year for the next 50 years. They assume inflation will average 3% over the long run, and they can earn 9% (compounded annually) on their investments. What lump sum do they need to invest today to attain their goal?

Kevin and Jennifer are ready to retire. They want to receive the equivalent of $40,000 in today's dollars at the beginning of each year for the next 50 years. They assume inflation will average 3% over the long run, and they can earn 9% (compounded annually) on their investments. What lump sum do they need to invest today to attain their goal?

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 8E
See similar textbooks
icon
Related questions
Question

Kevin and Jennifer are ready to retire. They want to receive the equivalent of $40,000 in today's dollars at the beginning of each year for the next 50 years. They assume inflation will average 3% over the long run, and they can earn 9% (compounded annually) on their investments. What lump sum do they need to invest today to attain their goal?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Money Management and Achieving Financial Goals
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
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
SEE MORE TEXTBOOKS