Mike Williams, a well-known real estate appraiser, just paid $390,000 for an insurance policy that will pay his wife Denise Williams $14,600 per year forever with the first payment in one year. The rate of return Mike and Denise William are earning on this policy is:

Q: how long in years and months will she receive the payments

A: RRSP: RRSP stands for Registered Retirement Savings Plan. RRSP is a kind of retirement savings and…

Q: what will their total PITI payment be?

A: PITI Payment: It represents principal, interest, taxes, and insurance payments towards the monthly…

Q: Calculate the return that Lin Shan is earning on her annuity.

A: Given, Investment - PV = 1000000 Payment - PMT = 60000/2 = 30000 years - N = 15 Period - m = 15*12 =…

Q: Mrs Right just purchased a new machine and wants to also set aside cash for future maintenance…

A: Annuity means finite no. of payments which are same in size and made in equal intervals for the…

Q: Greg purchased a house recently for $365,000.00. He plans to put a 20% down payment and borrows the…

A: Equivalent amount distributes present worth into equivalent uniform value over its useful life.

Q: Tim purchased a bounce house one year ago for $6,500. During the year it generated $4,000 in cash…

A: Given details are : Purchase price of house = $6500 Cash flow during the year form the house = $4000…

Q: Jamie is the beneficiary of P1,000,000 insurance policy. Instead of taking the money as lump sum,…

A: Given, Amount of insurance policy is P1,000,000 Term is 10 year 5% compounded annually.

Q: Bob Katz would like to save $250,000 over the next 25 years. If Bob knows today that he will be…

A: Amount likely to be saved is $250,000 Interest rate is 4% Inheritance received in year -15 is…

Q: A couple purchased a home 20 years ago for $200,000. The home was financed by paying 10% down and…

A: We need to use PMT formula to calculate monthly payment of mortgage. PMT =PV*r1-1(1+r)n

Q: Susan Orman wants to pay $1500 semiannually to her granddaughter for 10 years for helping her around…

A:

Q: Fatimah pays monthly rent of $520 for her townhouse. If she bought the property, the mortgage loan,…

A: When a series of deposits or payments are made of equal amounts at equal intervals of time, it is…

Q: Susan Orman wants to pay $1,500 semiannually to her granddaughter for 10 years for helping her…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is…

A: Roth IRA is a scheme for contribution into retirement account by the citizens of the United States…

Q: Bill O’Brien would like to take his wife, Mary, on a trip three years from now to Europe to…

A: Future value:

Q: Peter has opened a retirement investment account and plan to contribute $6,000 at the end of each…

A: Expected return is calculated by excel function RATE. For RATE function, future value FV is the…

Q: Ms. Ieda Silva plans to retire in 28 years and expects to live for 25 years after retirement. She is…

A: we can use discounting techniques to value the monthly deposits.

Q: esslyn has just given an insurance company RM1 million, a sum of money she just received from her…

A: The given problem can be solved using RATE function in excel. RATE function provides interest rate…

Q: Janice is hoping to save $200,000 by the time she retires in 20 years. How much must Janice deposit…

A: Future value is::$200000.. Contribution annually.. Rate of Interest is:::4%.... Required Deposit…

Q: Carol wants to have $500,000 when she retired in 25 years.  Her credit union has an ordinary annuity…

A: GIVEN, FV = $500,000 N=25 M=12 R=4%

Q: Katy has decided she wants to put money aside for a $8000 downpayment on a house. She figures she…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Katie recently retired and met with her financial planner. She arranged to receive $40,000 the first…

A: Solution-a1=$40,000a2=$40,000+$210     =$40,210

Q: . Find the monthly payment (including taxes and insurance). U

A: Information Provided: Downpayment = 20% Amount = $310,000 Interest rate = 4% Term = 360 years Taxes…

Q: A couple purchased a home 20 years ago for $200,000. The home was financed by paying 10% down and…

A: Solution Concept When the down payment is made on the loan such down payment shall reduce the…

Q: Susan gets a job upon completion of her MSME degree with a mechanisms design firm. Her starting…

A: Working note:

Q: 1. To save for their new child's college education, a couple places $28,400 in an account. What…

A: Present value of a future amount With periodic compounded interest rate (i), period (n) and future…

Q: Susan Orman wants to pay $1,500 semiannually to her granddaughter for 10 years for helping her…

A: Present Value of annuity refers to the current value of a series of equal cash flows or payments at…

Q: Jana, now 23 years old, is a grade school teacher in Batangas City. She has been invited by her high…

A: A deposit or payment of equal amount of money at equal intervals of time is called annuity.…

Q: Michael is updating his estate plan for himself and his family. He would like to provide an income…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Hayley has received an inheritance. She would like to set aside funds today that will allow her to…

A: The present value of a prospective amount of money or series of payments with a predetermined…

Q: When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25…

A: Loan amount (PV) = $315,700 Interest rate = 4.2% Monthly interest rate (r) = 4.2%/12 = 0.35% Period…

Q: When Gustavo and Serrana bought their home, they had a 5.7% loan with monthly payments of $870.60…

A: Given information : Interest rate on loan = 5.7% Monthly payments = $870.60 Time period = 30 years…

Q: How much should be his monthly withdrawals?

A: Given in the question: Principal amount deposited = P150,000 Interest Rate = 3% Interest is…

Q: A civil engineer planning for her retirement places 9% of her salary each year into a…

A: Salary = $160,000 Percentage in the retirement plan = 9%  Growth rate = 5%  Time period = 16 years…

Q: Cindy and Rick purchased a home for $145,000 and financed it with a 30-year fixed-rate loan at 6.25%…

A: Introduction Mortgage Loan: A mortgage is a loan that a borrower takes out to buy or retain a house…

Q: A couple wants to retire in 35 years and can save $400 every month. They plan to deposit the money…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: her new house. She can repay the loan in either of the two ways described below. (a) Five equal…

A: Inputs Borrowing Amount or Loan Amount = 5000

Q: Luis wants to have $2,000,000 in net worth when he retires. To achieve this goal, he plans to invest…

A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…

Q: Susan Orman wants to pay $1470 semiannually to her granddaughter for 11 years for helping her around…

A: The computation of the present value as follows:

Q: Peter and Amy Chambers have saved $4,500.  They are accumulating funds for a down payment on a…

A: If investment gives Simple Interest: Amount after 5 years = Principal + Interest for 5 years = 4500…

Q: After paying for their children's college education, Amy and Randy have $15,000 in annual savings.…

A: Annual saving (A) = $15000 r = 7.5% per annum n = 15 years We need to find the future value of…

Q: George plans to retire in 15 years. His current household expenses are $91000 per year. He estimates…

A: Estimate Retirement Expense = Current household expenses - Expenses that are not required after…

Q: Amy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she…

A: The cash flows discussed here are annuities where an equal amount is paid each period.

Q: Garrett and Erin are borrowing $170,000 to purchase a new home. They have been approved for a…

A: Using the PMT function in excel

Q: f Sarah’s retirement plan earns 5.75% compounded monthly, what amount will she have when she turns…

A: Future Value: It is the future worth of the investment or cashflows at a future point in time,…

Q: Sara has just graduated from college. She has determined that to purchase a home in 9 years she…

A: The amount of the annual annuity payment can be calculated using the below excel formula:

Q: Skylar bought a $270,000.00 house, paying 10% down, and financing the rest at 3% interest for 15…

A: A mortgage is a form of secured loan that is meant to be used to purchase or maintain real estate.…

Q: tarting 10.5 years from now and continuing for the next 20 years. He has started his account with an…

A: Annuity is a concept of uniform series of equal payment throughout the given time period. It can be…

Retirement Income

Retirement income is the income received by the retiring person after retirement. Income can either be paid every month or paid annually. The retiree would get a guaranteed income until their death. Retirement income payment differs from person to person based on their investment type and payment method. Some are paid on a lump-sum basis and some are paid in a regular series with fixed payment or variable cash flow. Retirement income can be created from retirement savings, investment, salary, bonus, and wages from employment. Every working individual should plan their retirement income according to their income goals for the future. The plan should be made by identifying suitable income sources, estimating future expenses, applying a savings plan, and managing risk and assets. The most common age for retirement is between 60-65 years.