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prisoha [69]
3 years ago
13

A couple will retire in 50 years; they plan to spend about $26,000 a year in retirement, which should last about 25 years. They

believe that they can earn 9% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
uranmaximum [27]3 years ago
3 0

Answer:

Monthly payment= $797.464

Explanation:

Giving the following information:

A couple will retire in 50 years.

They plan to spend about $26,000 a year in retirement, which should last about 25 years.

They believe that they can earn 9% interest on retirement savings

n= 50

i= 0.09

FV= (26000*25)=650000

We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

We need to isolate A (monthly pay):

A= (FV*i)/[(1+i)^n-1]

A= (650000*0.09)/(1.09^50-1)

A= 58500/73.35752008

A= $797.464

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uranmaximum [27]

Answer:

PMT x {[(1 + r)^n – 1]/r}

Explanation:

The formula for calculation the future value of an ordinary annuity is given as :

PMT x {[(1 + r)^n – 1]/r} ;

Where ;

PMT = Payment amount ; r = discount rate

n = number of payments

For ordinary annuity, payment are made at the end of each period as opposed payment made at the beginning of the period for annuity due.

3 0
3 years ago
Orrick Company reported total assets of $4,200,000, total liabilities of $700,000, and total equity of $3,500,000 at the end of
rewona [7]

Answer:

The debt-to-equity ratio of the company is 0.2

Explanation:

The formula to compute the debt to equity ratio is as:

Debt to equity ratio = Debt / Equity

Where

Debt is total liabilities which amounts to $700,000

Equity is total equity which amounts to $3,500,000

Putting the values in the above formula:

= $700,000 / $3,500,000

= 0.2

Debt to equity ratio of the company is 0.2

8 0
3 years ago
The Ribbon in the PowerPoint Online application allows users to quickly find commands to complete at task. True False
levacccp [35]
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8 0
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A company incurs total costs of $8,000 to process Product A. The company can then sell Product A as is for total daily revenue o
DochEvi [55]

Answer:

As the gross profit is the same for both products It is better to choose Product A because Product Z needs further processing a day , so time can also be the constraint.

Explanation:

Process Cost of Product A = $ 8000

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The gross profit for both products is same but product Z requires additional day for further processing so it is better to choose Product A.

3 0
3 years ago
A company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35. Which of th
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Answer:

correct option is here B. About 14.3

Explanation:

given data

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mean absolute deviation MAD = 35

solution

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tracking signal = \frac{RSFE}{MAD}     .................................1

put here value and we will get tracking signal

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so correct option is here B. About 14.3

4 0
3 years ago
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