You and your wife are making plans for retirement. You plan on living 25 years after you retire and would like to have $90,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retirement account will earn 12% annually. What amount do you need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent. $   Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent. $

Question

You and your wife are making plans for retirement. You plan on living 25 years after you retire and would like to have $90,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retirement account will earn 12% annually.

  1. What amount do you need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent.

    $  

  2. Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire? Do not round intermediate calculations. Round your answer to the nearest cent.

    $  

Expert Answer

1 Rating

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

Other

Related Finance Q&A

Find answers to questions asked by students like you.

Q: Expected Return A company's current stock price is $86.30 and it is likely to pay a $5.30 dividend n...

A: The formula to compute expected return is as follows: 

Q: A corporation arranges for a $10 million line of credit. The corporation needs to have regular acces...

A: Note: The options provided are incorrect, I have provided the solution with answer. Please recheck t...

Q: The equity beta of XYZ SE shares is estimated to be 0.8. The expectedequity market return is 8% per ...

A: The formula to calculate cost of equity is given below:

Q: (Calculating the ex-dividend stock price) Kingwood Corporation has a stock price of $115.62 per shar...

A: a) Ex-dividend date prices will fall by the amount of dividend paid.

Q: The present value of $500 to be received at the end of each year for seven years at adiscount rate o...

A: Annuities are a regular stream of payments made for a defined period. Resent value of these annuitie...

Q: Which of the following makes this a true statement? In this slightly more realistic world with corpo...

A: We derive a firm's value by discounting its future cash flows. We use weighted average cost of capit...

Q: JP Morgan currently trades at 136.81 and pays a dividend of $3.60. The firm’s EPS are $10.16. The re...

A: Given that the current share price is $136.81, dividend payment is $3.60 and the eps or earnings per...

Q: The Excel file Immunization Using Individual Bonds contains information about three bonds. Use this ...

A: Bond 1:Yield to maturity = 7%Coupon Rate = 8% Calculation of Bond duration using excel is as follows...

Q: Use the following information: Debt: $79,000,000 book value outstanding. The debt is trading at 94%...

A: Calculate the market value of debt (D) as follows: