Question 2You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequentyear, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire?4142434445t

Total Savings in the bank during retirement is $1000000Total savings this year is $5000The increment…

Answered: You want to have a million dollars in…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
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How much money do you need to deposit in a bank account now so that you can withdraw $10,000 every 4 years forever if the interest rate is 7% per year, and the first withdrawal is scheduled 4 years from now? O a. $31,051 O b. $41,051 O c. $34,583 d. $138,332 e. $32,175
You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequent year, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire? 41 42 43 ✓44 45
1On the day you retire you have $500,000 saved. You expect to live another 30 years during which time you expect to earn 8% on your savings while inflation averages 3.5% annually. Assume you want to spend the same amount each year in real terms and die on the day you spend your last dime. What real amount will you be able to spend each year?  a. $61,931.78 b. $79,211.09 c. $79,644.58 d. $30,695.77 2Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 3What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36
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You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequent year, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire?