1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Monica [59]
3 years ago
14

Your sister turned 35 today, and she is planning to save $7,000 per year for retirement, with the first deposit to be made one y

ear from today. She will invest in a mutual fund that's expected to provide a return of 7.5% per year. She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can she spend each year after she retires

Business
2 answers:
iris [78.8K]3 years ago
8 0

Answer:

She can spend $64,932  each year after she retires

Explanation:

Future Value of deposits = 7000[(1+i)^{30} + (1+i)^{29} + ... + (1+i)^{1}] , where i = 7.5%

= $778,080

The value of her fund at retirement is $778,080.

Let the annual drawing be of amount Z.

The Present Value of drawings should equal the size of fund.

$778,080 = Z[(1+i)^{-0} +(1+i)^{-1} +...+ (1+i)^{-24}] , where i = 7.5%

$778,080 = Z*11.98

Z = $64,932

Mrac [35]3 years ago
5 0

Answer:

$64,932

Explanation:

Calculate the accumulated sum after 30 years by using below formula:

S = R[(1+i)^n - 1]/i  

Where

S = the accumulated sum

R = the yearly deposit

i = the decimal interest rate per year

n = the total count of deposits

This results in a sum accumulation of $723,796.

Now calculate annual payout for a 25-year old annuity by using below formula:

R = Pi/[1 - (1+i)^(-n)]  

This gives the PMT of $64,932.  

You might be interested in
The entry to establish a petty cash fund includes:___________
guapka [62]

Answer:

c) a debit to Petty Cash and a credit to Cash.

Explanation:

According to the golden rule of double of entry that a giver should be credited while a receiver is debited, the cash account is the giver in this case would be credited while the receiver,the petty cash account would be debited on the other hand.

The correct option which corroborates my explain above is option C.

Option A is wrong because the reverse was the case.

7 0
3 years ago
Which term best describes an opening at least 30 inches high and 18 inches wide in any wall or partition through which persons m
WITCHER [35]
It's C for sure because according to the question cause theirs an opening in any wall
4 0
3 years ago
Equity method journal entries (price greater than book value) An investor purchases a 25% interest in an investee company, and t
Crazy boy [7]

Answer:

See answer an explanation below.

Explanation:

The journal entries will look as follows:

<u>General Journal </u>

<u>Description                                          Debit ($)             Credit ($)          </u>

Equity investment                               145,000

Cash                                                                                  145,000

<em><u>(To record purchase of investment.)                                                      </u></em>

Cash                                                      25,000

Income from equity investment (w.1)                              25,000

<em><u>(To record equity income.)                                                                       </u></em>

Cash                                                     20,000

Equity investment                                                            20,000

<u><em>(To record receipt of cash dividend.)                                                      </em></u>

Income from equity investment           2,000

Equity investment (w.2)                                                     2,000

<em><u>(To record patent amortization expense.)                                             </u></em>

Cash                                                   180,000

Gain on sale of equity invest. (w.4)                                 32,000

Equity investment (w.3)                                                  148,000

<u><em>(To record sale of investment.)                                                              </em></u>

Workings

w.1: Income from equity investment = Investee's net income * Percentage of interest = $100,000 * 25% = $25,000

w.2: Equity investment = (Patent value / Remaining useful life) * Percentage of interest = ($80,000 / 10) * 25% = $8,000 * 25% = $2,000

w.3: Equity investment = $145,000 + $25,000 - $20,000 - $2,000 = $148,000

w.4: Gain on sale of equity investment = Sales proceed - w.3 = $180,000 - $148,000 = $32,000

4 0
3 years ago
Hugh tried to convince irene about how good a new business proposal was, but irene presented some good counter arguments and sta
vfiekz [6]
By questioning the proposal done by Hugh, Irene showed the characteristic of being able to scrutinize properly certain things. This attitude is helpful especially when we are in doubt of the certain subject. By doing so, we can help those who proposed it to further do improvements on the certain subject. 
3 0
3 years ago
​kellogg's begins to sell its cereals in new markets after conducting extensive marketing research. after the cereal begins to a
Dafna11 [192]
<span>The fact that Kellog is increases its promotion expenditure to counteract competitive responses means that </span>Kellogg's is in the​ maturity stage of the product life cycle. The maturity stage us the third stage of the product life cycle, and comes a<span>fter the </span>Introduction<span> and </span>Growth<span> stages.
</span>In this stage the companies are focused on maintaining their market share in the face of a number of different challenges.
7 0
3 years ago
Other questions:
  • Consider the figures below and determine which is the best description of what causes the shift from ad1 ad1 to ad2 ad2.
    12·1 answer
  • _____ give the job seeker the ability to search several different Internet career sources at the same time.
    13·1 answer
  • Blanchard Company manufactures a single product that sells for $140 per unit and whose total variable costs are $112 per unit. T
    12·1 answer
  • The price elasticity of demand for widgets has a value of zero.of zero. nothing this demand curve would be best described as
    14·1 answer
  • Which of the following describes a process in which marketers present an accurate description of a new product to potential cust
    6·2 answers
  • If the equilibrium price of solar panels is $200 per panel, but a price ceiling of $150 per panel is imposed, what happens to th
    7·1 answer
  • The effects of inflation Suppose Friendly Airlines is considering signing a long-term contract with the union representing its p
    8·1 answer
  • Why is it important to reconcile your bank statements?
    13·1 answer
  • Each of the following items would drive the need for layout planning except ______.
    11·1 answer
  • We would expect the cross elasticity of demand between dress shirts and ties to be?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!