Your father now has $1,000,000 invested in an account that pays 9.00%. He expects inflation to average 3%, and he wants to make annual constant dollar (real) end-of-year withdrawals over each of the next 20 years and end up with a zero balance after the 20th year. How large will his initial withdrawal (and thus constant dollar [real] withdrawals) be?
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Your father now has $1,000,000 invested in an account that pays 9.00%. He expects inflation to average 3%, and he wants to make annual constant dollar (real) end-of-year withdrawals over each of the next 20 years and end up with a zero balance after the 20th year. How large will his initial withdrawal (and thus constant dollar [real] withdrawals) be?
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- BEGINNING WITHDRAWALS Your father now has $1,000,000 invested in an account that pays 9.00%. He expects inflation to average 3%, and he wants to make annual constant dollar (real) beginning-of-year withdraoals over each of the next 20 years so the account has a zero balance after the 20th year. How large will his initial withdrawal (and thus constant dollar [real] withdrawals) beYou have $187,620 saved today and plan to withdraw $9,000 a year. How long can you make these withdrawals if you earn an annual percentage rate of 4.8 percent?You have $14,000 in the bank today. How much would you need to save each year in order to accumulate $3,000,000 in 30 years? Assume the interest rate is 10% and that the payments occur at the end of each year beginning one year from today. Enter
- You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in an account A and $300 a month in an account B. The return of the stock account is expected to be 11 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a 9 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?You are planning to save for retirement over the next 35 years. To do this, you will invest $700 a month in a stock account and $350 a month in a bond account. The return of the stock account is expected to be 13.0 percent, and the bond account will pay 6.0 percent. When you retire, you will combine your money into an account with an 11 percent return. How much can you withdraw each month from your account, assuming a 30-year withdrawal period? (Do not round intermediate calculations. Round the answer to 2 decimal places. Omit $ sign in your response.)You are planning to save for retirement over the next 20 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 8 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period? A. $623407 B. $630939 C. $635876 D. $7480888 E. $2259917
- You are planning to save for retirement over the next 30 years. To save for retirement, you will invest $1,050 a month in a stock account in real dollars and $530 a month in a bond account in real dollars. The effective annual return of the stock account is expected to be 10 percent and the bond account will earn 6 percent. When you retire, you will combine your money into an account with an effective annual return of 8 percent. The inflation rate over this period is expected to be an effective annual rate of 3 percent. How much can you withdraw each month from your account in real terms assuming a withdrawal period of 25 years? What is the nominal dollar amount of your last withdrawal?Bob wants to retire in 15 years, and he wants his savings to be enough to provide the same buying power as an amount of 500,000 could provide today. He believes that inflation will cause prices to increase by 6% each year over the next 15 years, and that his investments will earn an annual effective rate of return of 4%. He can save $500 at the end of every month the first year, and he plans to increase the deposits yearly by a constant percent. Assuming that his estimates of 6% annual inflation and 4% return rate are correct, what percent annual increase in his savings rate will help him reach his goal?Dave wants to retire in 30 years, and he wants his savings to be enough to provide the same buying power as an amount of 1,000,000 could provide today. He believes that inflation will cause prices to increase by 3% each year over the next 30 years, and that his investments will earn an annual effective rate of return of 8%. He can save $1000 at the end of every month the first year, and he plans to increase the deposits yearly by a constant percent. Assuming that his estimates of 3% annual inflation and 8% return rate are correct, what percent annual increase in his savings rate will help him reach his goal? Do NOT use excel to compute values, show work using annuity formulas!
- The Carrolls have $300,000 in a bank. If they get 5% compounded monthly and withdraw $20,000 at the end of each month, how many withdrawals can they make? What will be the size of the concluding withdrawal if it is made one month after the last full withdrawal?Mr. Jones is planning a 20-year retirement; he wants to withdraw 300,000 at the end of the first year, and then to increase the withdrawals by 40,000 each year to offset inflation. How much money should he have in his savings account at the start of his retirement, if the bank pays 9% per year, compounded annually, on his savings? Draw cash flow diagram.You are planning to save for retirement over the next 30 years. To do this, you will invest$700 a month in a stock account and $300 a month in a bond account. The return of thestock account is expected to be 10 percent, and the bond account will pay 6 percent.When you retire, you will combine your money into an account with an 8 percent return.How much can you withdraw each month from your account assuming a 25-yearwithdrawal period?