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icang [17]
3 years ago
13

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wa

nts a fixed retirement income that has the same purchasing power at the time he retires as $60,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $105,000 saved, and he expects to earn 8% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal?
Business
1 answer:
Hunter-Best [27]3 years ago
6 0

Answer:

It will need  $ 107,120.321 dolalr per year to achieve his retirement goal

Explanation:

We first must calcualte the prsent value of the 25 payments with equal worth of 60,000 dollar of today.

First we move the 60,000 forward 10 years

Principal \: (1+ r)^{time} = Amount

Principal 60,000.00

time 10.00

rate 0.05000

60000 \: (1+ 0.05)^{10} = Amount

Amount 97,733.68

Now, we calculate the present value of an annuity considering this 5% inflation

C_0 \times \frac{(1+r)^n-(1+g)^n}{r-g}  = PV

g 0.05

r 0.08

C 97,734

n 25

$ 1,778,492.341

Then, decrease this by the amounnt already saved by our father:

Principal \: (1+ r)^{time} = Amount

Principal 105,000.00

time 10.00

rate 0.08000

105000 \: (1+ 0.08)^{10} = Amount

Amount 226,687.12

Additional saving needed:

1,778.492-34 - 226,687.12 = 1.551.805,22

Now, we solve the annual saving to achieve this future value:

PV \div \frac{(1+r)^{time} -1}{rate} = C\\

PV 1,551,805.22

time 10

rate 0.08

1551805.22 \div \frac{(1+0.08)^{10} -1}{0.08} = C\\

C  $ 107,120.321

‬

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Answer:

67%

Explanation:

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2 years ago
In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases,
nordsb [41]

Answer:

Option A is correct.

deficit; negative

Explanation:

In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade <u>deficit </u>and <u>negaive</u> net capital outflow.

This corresponds to the concept of twin deficits where a budget deficit that results from increased government purchases, also results in current account deficit. Since trade deficit implies negative NX there is a negative NCO.

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2 years ago
During the current year, assets increased from $11,000 to $19,000, and liabilities decreased from $9,000 to $7,500. If no additi
garik1379 [7]

Answer:

$34,500

Explanation:

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3 years ago
Select all the correct answers.
Lorico [155]

Answer:

A decrease in demand leads to a decrease in supply.

A decrease in price leads to a decrease in supply.

An increase in price leads to an increase in supply.

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Supply refers to the volume of a product that sellers are willing to sell in the market at a given price. As per the law of supply, a higher price motivates sellers to avail more products in the markets. Sellers or suppliers are businesses and are motivated by higher profits.  When prices are high, the profit margin will be high, which is an incentive for increased supply. Lower prices have lower margins, which is a risk to a business. Low prices result in reduced prices.

Supply is influenced by demand. If supply does not match demand, there will be either a shortage or excess supply in the market. When demand is low, sellers will reduce supply to avoid losses associated with excess supply .

8 0
2 years ago
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