Tom plans to save $2,000 for each of the next ten years, starting tonight when he will write his financial planner a check for $2,000. If Tom can earn a 10% annual return, what amount of money will he have at the end of the 10th year?

Tom plans to save $2,000 for each of the next ten years, starting tonight when he will write his financial planner a check for $2,000. If Tom can earn a 10% annual return, what amount of money will he have at the end of the 10th year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

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Concept explainers

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.

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