Warren reed just turned 40. He has decided that he would like to retire when he is 65? He tjinks he will need $1.5M at the age of 65. For the next 15 years he puts $12K per year into the account. At age 55 he will need to withdraw $40K for membership. If his retirement acct earns 11% compounded annually, how much will Warren need to deposit into it each year for the last ten years of his work career to attain the $1.5 M goal?

Question

Warren reed just turned 40. He has decided that he would like to retire when he is 65? He tjinks he will need $1.5M at the age of 65. For the next 15 years he puts $12K per year into the account. At age 55 he will need to withdraw $40K for membership. If his retirement acct earns 11% compounded annually, how much will Warren need to deposit into it each year for the last ten years of his work career to attain the $1.5 M goal?

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Related Finance Q&A

Find answers to questions asked by students like you.

Q: Kaye's Kitchenware has a market/book ratio equal to 1.200. The firm's stock price is 12.30 USD/share...

A: Market/book ratio of equity = 1.200Hence, MVE / BVE = 1.2Current stock price, P = $ 12.30 / shareNos...

Q: Hello.  Could I please get step by step instructions/example of how to compute a car loan to determi...

A: Any lender provides a loan based on loan to value (LTV) ratio. If V is the value of the car you are ...

Q: 1. Multinational corporations Why do companies go global? Multinational corporations operate in loca...

A: The best describe reason for Saltwater Corp is “to seek production efficiency”.Justification: The co...

Q: Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball...

A: Calculation of Annual Depreciation Tax Shield:

Q: Final Assignment Ed Draycutt is the engineering manager of Airway Technologies, a firm that makes co...

A: Evaluation of Ed’s analysis:Net present value is the one of the best techniques of capital budget as...

Q: I asked this question (provided below) and was able to follow the response.  I also got the same ans...

A: Thanks a lot for appreciating the earlier solution. I also appreciate your question. Let me help you...

Q: Moerdyk Corporation's bonds have a 9-year maturity, a 7.75% semiannual coupon, and a par value of $1...

A: The price of a bond can be calculated using the PV function in excel. We have to select the inputs o...

Q: A project costs $1 million and has a base-case NPV of exactly zero (NPV sign. Enter your answers in ...

A: a.Calculation of Adjusted Present Value:

Q: Robinson's has 46,000 shares of stock outstanding with a par value of $1 per share and a market pric...

A: The firm announces the stock split of 2-for-1.

Q: Ornaments, Inc., is an all-equity firm with a total market value of $641,000 and 30,600 shares of st...

A: Scenario: RecessionEBIT = EBIT when economy is normal x (1 - 15%) = $ 91,700 x (1 - 15%) = $ 77,945 

Q: A firm evaluates all of its projects by applying the IRR rule. The required return for the following...

A: Calculation of IRR:Using Excel Spreadsheet:

Q: Which are the main legislative acts governing the Mergers & Aquisition activities in the United ...

A: Mergers and Acquisitions (M&A) are transactions of uniting two or more companies into one. The m...

Q: Case Study #2: Chapter 5 Business Analysis - Harry, a friend of yours, is taking a course in economi...

A: If we have money today, we can use it in two ways:We can use the money to buy something that we want...

Q: The credit card with the transactions described in the popup below uses the average daily balance me...

A: Credit CardIt is a card issued to customers for making payment towards goods and services. These car...

Q: Bonds of Francesca Corporation with a par value of $1,000 sell for $960, mature in five years, and h...

A: We have :Fac Value of the bond : $1,000Current Market Price : $960Years to Maturity : 5 yearsCoupon ...

Q: The Company dividend appears to grow smoothly at a constant rate of 5.5%. Analysts forecast that nex...

A: Recall the Gordan Growth Model with constant growth. Price at any time t is given byPt = Dt+1 / (ke ...

Q: Book Value versus Market Value Dinklage Corp. has 8 million shares of common stock outstanding. The ...

A: Equity Details:Dinklage Corp. has Ns = 8 million shares of common stock outstanding.The current shar...

Q: 3. Finding the interest rate and the number of years Aa Aa E The future value and present value equa...

A: Calculating the implied interest rate the investor will earn on the security by using the formula of...

Q: Suppose that, in each period, the cost of a security either goes up by a factor of 2 or goes down by...

A: We have two options here, first is doubling and second is moving down by half. We assume that the pr...

Q: in the firm's most recent financial statements, newhouse, inc. reported 57 mil usd of ni and 808 mil...

A: Let's say, RE represents retained earning, NI represents net income and D represents dividends decla...

Q: The following are the current coupon yields to maturity and spot rates of interest for six U.S. Trea...

A: In the next step, we identify the values from the question. 

Q: Dave's Lumber earned $120 million last year and retained $72 million. A. What is his payout ratio?

A: Calculating the value of dividend paid. We have,Value of dividend paid = Total Earnings – Retained E...

Q: A factory cost $330,000. You forecast that it will produce cash inflows of $105,000 in year 1, $165,...

A: All financials are in $.Let PV(I) = Present value of all the cash inflows and Ci be the cash inflow ...

Q: Walter is investing $5,000in an account paying 6.75 percent annually for three years. What is the in...

A: Principal invested, P = $ 5,000Interest rate, R = 6.75%Time, T = 3 yearsAs a first step, we will fin...

Q: A firm has two possible investment with the following cash inflows. Each investment cost $480, and t...

A: Upon visula Inspection, we can deduce that investment A will have shorter payback period (<2 year...

Q: Until August 1971, industrialized countries around the world maintained a fixed exchange rate of the...

A: Answer 1:The correct answer is “Forward exchange rate”.Justification:  A forward exchange rate is wh...

Q: You are saving for your retirement. You have decided that one year from today you will deposit 5perc...

A: First payment, A = 5% x Annual salary a year later = 5% x 90,000 x (1 + 2%) = $ 4,590.00 Growth rate...

Q: a firm has an a profit margin of 3.8% and an equity multiplier of 1.90. its sales are 166.0 mil usd,...

A: Using Dupont's ROE decomposition formula,ROE = Net income / Equity = Net income / Sales x Sales / To...

Q: Assume Technical Investors is thinking about three different size offerings for issuance of addition...

A: The percentage underwriting spread for each size offer is calculated as follows:Percentage underwrit...

Q: How I can resolve this problem.  The management of a firm wants to introduce a new product. the prod...

A: a. what is the break-even level of outpur for each scale of operation?In the first scale of operatio...

Q: Please can you show me how to solve for P step by step thank you

A: Click to see the answer

Q: Wayne, Inc., wishes to expand its facilities. The company currently has 6 million shares outstanding...

A: Calculation of New Book Value per share:

Q: Part E. Assume that the group plans to reinvest $50,000 of its profits in the practice by buying a n...

A: From the question and previous workings we have:Operating Profit :$1,190,745Cost of EKG Machine : $5...

Q: Suppose you observed the following situation:   Security Beta Expected Return   Cooley, Inc. 1.6 19%...

A: Calculation of Risk Free Rate:The risk free rate can be calculated using the CAPM. Follow the below ...

Q: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today. Otherwise...

A: Let's assume the cost of purchase is C. On immediate payment,Discount = 4%Hence, the discounted cost...

Q: Ed Draycutt is the engineering manager of Airway Technologies, a firm that makes computer systems fo...

A: You have asked a case sudy with four sub parts. I will answer the first three sub parts. Please post...

Q: You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street...

A: All financials in this solution are in $.Rate per month = R = (1 + EAR)1/12 – 1 = 1.091/12 – 1 = 0.7...

Q: Can you help me solve this step by step. Thank you

A: Please see the white board. 

Q: Please calculate the Sharpe measure for the S&P 500 over the last ten years if the standard devi...

A: Sharpe Ratio or Sharpe measure of a security = Return in excess of risk free rate / Standard deviati...

Q: A stock with a beta of 0.8 has an expected rate of return of 12%. If the market return this year tur...

A: Recall the famous CAPM equation to estimate the expected rate of return on a stock:R = Rf  + β x (Rm...

Q: Romagnoli Company is considering a 3-year investment project that involves the purchase of a new man...

A: Since we have to handle multiple variables here, we will use Microsoft Excel to get the final answer...

Q: Suppose that the value of an investment in the stock market has increased at an average compound rat...

A: Calculation of Worth of Investment Today:With the current year being 2016, there are totally 112 yea...

Q: A firm with sales of $500,000 has average inventory of $200,000. T he industry average for inventory...

A: Computation of inventory turnover:

Q: Is the corporate tax schedule progressive? Why or why not?

A: A tax schedule can either regressive or progressive. It depends upon how the scehdule has been drawn...

Q: Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barrin...

A: Part (a)D0 = $4.10; Ke = 14%; Dividend growth rate = g = 4%D1 = D0  x (1 + g) = 4.10 x (1 + 4%) = 4....

Q: One year​ ago, your company purchased a machine used in manufacturing for $90,000. You have learned ...

A: Calculation of NPV of Replacement:To calculate the NPV of Replacement, follow the below steps:

Q: Inzaghi Company recently hired you as a consultant to estimate the company’s WACC. You have obtained...

A: WACC is the weighted average cost of capital. The same can be calculated as:WACC = Wd x Kd x (1 - T)...

Q: Six potential services a bank provides?

A: A bank is a financial institution that accepts deposits from the public and makes loans from these d...

Q: Let C be the price of a call option that enables its holder to buy one share of a stock at an exerci...

A: Given that, K is the exercise price, S is stock price at time 0.

Q: What is the value of a 30-year annuity that pays $2500 a year? The annuity’s first payment will be r...

A: As a fist step, let's shifts ourselves to the end of t  = 10 years.Annuity, A = $ 2,500; n = number ...