Business

FinanceQ&A LibraryWarren 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?Start your trial now! First week only $4.99!*arrow_forward*

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?

Tagged in

Business

Finance

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 ...