You want to be able to withdraw $45,000 from your account each year for 30 years after you retire. You expect to retire in 25 ye
ars. If your account earns 6% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
1 answer:
Answer:
Expected withdrawal is $45,000 for 30 years = total of $1,350,000
You will be required to invest in $25.063 every year.
Explanation:
By applying the goal seek formula in excel to determine the annual invested fund, based on a compounded interest rate of 6% over a duration of up to a maximum of 25 years from Year 0, we can clearly see that Savings ought to be $25,063 for every year.
The future Value of each saved fund is derived and added to future value of each years subsequent saved fund to arrive at a total expectation of $1,350,000 expected value after 25 years (i.e. $45,000 annual withdrawal x 30 years of withdrawal)
This brings total savings to $626,572 for the entire 25 years
Kindly refer to the attachment for breakdown of workings.
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Answer:
It increases by 50 units.
Explanation:
Current break even point =
Here, fixed cost = $4,500
Contribution per unit = Selling price - Variable Cost = $20 - $10 = $10
Current break even point =
If variable cost increase by 10% then revised variable cost = $10 + 10% = $11
Contribution per unit = $20 - $11 = $9 per unit
Break even sales in units =
Difference in original and revised break even = Revised - Original = 500 - 450 units = 50 units,
Thus original break even increases by 50 units, = 50/450 = 11.11% increase.
Final Answer
It increases by 50 units.