You decide to save $431 per month in equity securities, which you anticipate earning an interest rate of 11.56 percent APR with monthly compounding. You also decide to save $262 per month in debt securities, which you anticipate earning an interest rate of 7.54 percent APR with monthly compounding. You plan to save for 41 years until you reach retirement at that time. When you retire, you plan to combine your savings into an account which will earn 7.49 percent APR with monthly compounding. What monthly payment can you afford to pay yourself during retirement if you plan to retire for 34 years? (Assume all cash flow streams are regular/ordinary annuities.) None of these options are correct O $39,477.88 $47,373.46 O $118,433.64 O$59,216.82

You decide to save $431 per month in equity securities, which you anticipate earning an interest rate of 11.56 percent APR with monthly compounding. You also decide to save $262 per month in debt securities, which you anticipate earning an interest rate of 7.54 percent APR with monthly compounding. You plan to save for 41 years until you reach retirement at that time. When you retire, you plan to combine your savings into an account which will earn 7.49 percent APR with monthly compounding. What monthly payment can you afford to pay yourself during retirement if you plan to retire for 34 years? (Assume all cash flow streams are regular/ordinary annuities.) None of these options are correct O $39,477.88 $47,373.46 O $118,433.64 O$59,216.82

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

See similar textbooks

Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?