You are planning for an early retirement, so you decide to invest $5,000 per year, starting at age 23. You plan to retire when you accumulate $1,000,000. If the average rate of return on your investments is 8%, which formula in B4 will allow you to determine how many years you must invest?Calculate this on excel seat with formulas

You are planning for an early retirement, so you decide to invest $5,000 per year, starting at age 23. You plan to retire when you accumulate $1,000,000. If the average rate of return on your investments is 8%, which formula in B4 will allow you to determine how many years you must invest?Calculate this on excel seat with formulas

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
11. You are planning for an early retirement, so you decide to invest $5,000 per year, starting at age 23. You plan to retire when you accumulate $1,000,000. If the average rate of return on your investments is 8%, which formula in B4 will allow you to determine how many years you must invest?explain in excel
6. You decide you want to start investing for your retirement and you want to have $650,000. If you save $100 a month in an account that averages a 10% annual rate of return, will you have enough money in 25 years? (Hint: this formula was introduced in Section 1)
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 29 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 7.0% in retirement)? d. If, instead, you decide to withdraw $70,000 per year in retirement (again with the first withdrawal one year after retiring), how…
Use Excel to solve the following problem. Assume that you are 39 years old planning for your future retirement at age 65. You think that you will be comfortable living on the proceeds from a $1,000,000 401K Retirement Account.a. If your investments grow at an average rate of 6% annually how much must you invest monthly to achieve your projected retirement fund total by the time you retire in 26 years?b. Assuming that when you do retire, you will re-direct your $1,000,000 investment portfolio into less volatile and more secure mutual funds. You expect that, invested in these sources, your portfolio will securely earn 4.5% annually. Based on your assumptions and the normal life expectancy of an American male or female (I determined this to be 81 years old), without consuming any of your principal, how much money will you have on a monthly basis to support your life?(I have worked this problem out on my own, I just want to be sure I applied the formulas and concepts correctly.)
You want to retire in 40 years as a millionaire (i.e., to have $1,000,000). If 6% is the average rate of return on the investment during this time period, then how much should you invest per month starting at the end of this month? a. $502 b. $702 c. $802 d. $602
1. You are planning to buy your dream mansion and for that you have decided to make 3 independent investments with your savings money in the next 44 years. You plan to invest $4,100 at the end of each year for the first 17years, $6,900 at the end of each year for the following 11 years, $14,500 at the end of each year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% on your investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be able to fulfill your dream with those 3 investments?
Suppose you are committed to owning a $343,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 12.9 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Suppose you inherited $100,000 and invested it at 7% per year. What is the most you could withdraw at the end of each of the next 10 years and have a zero balance at Year 10? How would your answer change if you made withdrawals at the beginning of each year? SHOW WORK AND USE FINANCIAL CALCULATOR