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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.  

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An ethical ad is the one which doesn’t lie, doesn’t make fake or false claims and is in the limit of decency.

Nowadays, ads are more exaggerated and a lot of puffing is used. It seems like the advertisers lack knowledge of ethical norms and principles. They just don’t understand and are unable to decide what is correct and what is wrong.

The main area of interest for advertisers is to increase their sales, gain more and more customers, and increase the demand for the product by presenting a well decorated, puffed and colorful ad. They claim that their product is the best, having unique qualities than the competitors, more cost effective, and more beneficial. But most of these ads are found to be false, misleading customers and unethical. The best example of these types of ads is the one which shows evening snacks for the kids, they use coloring and gluing to make the product look glossy and attractive to the consumers who are watching the ads on television and convince them to buy the product without giving a second thought.

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(that is same question on my papers)

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