you are trying to determine how much you should save fc you can spend now. For retirement, you will deposit toda. sum in a bank account paying 10 percent compounded an touching this deposit until you retire in five years (Januar on living for 20 additional years. During your retirement a payment of $50,000 on the first day of each year, with ary 1, 2021, and the last payment on January 1, 2041(C your desire to have one final three-year fling during whi down all the original cast members of Hey Dude and Sa autographs. To finance this, you want to receive $250,00 nothing on January 1, 2037, and January 1, 2038, becau In addition, after you pass on (January 1, 2041),)you wc $100,000 to leave to your children. a. How much must you deposit in the bank at 10 perce to achieve your goal? (Use a timeline to answer this the last second of December 31 is equivalent to the b. What kinds of problems are associated with this ana (Çalculating the future value of a complex annuity) Spri ire at age 100 so he can stea $1 billic
you are trying to determine how much you should save fc you can spend now. For retirement, you will deposit toda. sum in a bank account paying 10 percent compounded an touching this deposit until you retire in five years (Januar on living for 20 additional years. During your retirement a payment of $50,000 on the first day of each year, with ary 1, 2021, and the last payment on January 1, 2041(C your desire to have one final three-year fling during whi down all the original cast members of Hey Dude and Sa autographs. To finance this, you want to receive $250,00 nothing on January 1, 2037, and January 1, 2038, becau In addition, after you pass on (January 1, 2041),)you wc $100,000 to leave to your children. a. How much must you deposit in the bank at 10 perce to achieve your goal? (Use a timeline to answer this the last second of December 31 is equivalent to the b. What kinds of problems are associated with this ana (Çalculating the future value of a complex annuity) Spri ire at age 100 so he can stea $1 billic
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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Transcribed Image Text:house's first contribution is made one year from today and his last is made the day he
mo p00,000 per year. II Mil-
retires, how much money must he contribute each year to his retirement fund?
(Solving a comprehensive problem) Having just inherited a large sum of money,
you are trying to determine how much you should save for retirement and how much
you can spend now. For retirement, you will deposit today (January 1, 2016) a lump
sum in a bank account paying 10 percent compounded annually: You don't plan on
touching this deposit until you retire in five years (January 1, 2021), and you plan
on living for 20 additional years. During your retirement, you would like to receive
a payment of $50,000 on the first day of each year, with the first payment on Janu-
ary 1, 2021, and the last payment on January 1, 2041(Complicating this objective is
desire to have one final three-year fling during which time you'd like to track
your
down all the original cast members of Hey Dude and Saved by the Bell and get their
autographs. To finance this, you want to receive $250,000 on January 1, 2036, and
nothing on January 1, 2037, and January 1, 2038, because you will be on the road.
In addition, after you pass on (January 1, 2041),) you would like to have a total of
$100,000 to leave to your children.
a. How much must you deposit in the bank at 10 percent interest on January 1, 2016,
to achieve your goal? (Use a timeline to answer this question. Keep in mind that
the last second of December 31 is equivalent to the first second of January 1.)
b. What kinds of problems are associated with this analysis and its assumptions?
Burns, age 80, wants to retire at age 100 so he can steal candy from babies full-time.
he wants to withdraw $1 billion at the beginning of each year
unt that will pay 20 percent annually. In
end-of-the-year deposits
oney will
. (Calculating the future value of a complex annuity) Springfield mogul Montgomery
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