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
Oksanka [162]
3 years ago
15

You have just turned 30 years​ old, have just received your​ MBA, and have accepted your first job. Now you must decide how much

money to put into your retirement plan. You are required to specify a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $ 70 comma 000 per year and it will grow 1.8 % per year until you retire. Every dollar in the plan earns 6.5 % per year. You cannot make withdrawals until you retire on your​ sixty-fifth birthday. After that​ point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you turn 65. You estimate that to live comfortably in​ retirement, you will need $ 97 comma 000 per year starting at the end of the first year of retirement and ending on your 100th birthday. What percentage of your income do you need to contribute to the plan every year to fund your retirement​ income?
Business
1 answer:
igor_vitrenko [27]3 years ago
8 0

Answer:

Find attached

Explanation:

The present value of $97,000 per year after retirement for 35 years is computed thus:

=-pv(rate,nper,pmt,fv)

rate is the plan rate of return of 6.5%

nper is 35 years(years after retirement)

pmt is the amount required per year

fv is not applicable is taken as zero

=-pv(6.5%,35,97000,0)=$1,327,634.80  

The amount needed in the account at retirement is the future value of the plan.

Regular yearly payment into the plan is =pmt

=pmt(rate,nper,-pv,fv)

=-pmt(6.5%,35,0,1327634.80)=$ 10,703.74

The percentage of income that must be contributed is found in the attached

Download xlsx
You might be interested in
For the past year, lp gas, inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders. the in
Sergio039 [100]

If for the past year, lp gas, inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders. the interest paid was $2,300. The amount of the net new borrowing is:-$14,300.

<h3>Net new borrowing</h3>

First step is to calculate the  cash flow to creditors

Cash flow to creditors = $38,100 -$21,500

Cash flow to creditors= $16,600

Second step is to calculate the net new borrowing using this formula

Net new borrowing =Interest paid -Cash flow to creditors

Let plug in the formula

Net new borrowing = $2,300 - 16,600

Net new borrowing  = -$14,300

Therefore If for the past year, lp gas, inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders. the interest paid was $2,300. The amount of the net new borrowing is:-$14,300.

Learn more about net new borrowing here:brainly.com/question/14703385

#SPJ1

5 0
1 year ago
The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more co
Aleks04 [339]

Answer: The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom C. grow more rapidly and achieve larger poverty rate reductions.

Explanation: Countries that have policies in place are more likely to achieve growing at a faster rate and reductions because their people follow the rules and work hard to meet the expectations of the person in charge of their country. Free countries normally do not have steps in place to have a strong economic system and supporters of it.

6 0
3 years ago
Jake’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $60000, terms 2/10, n
castortr0y [4]

Answer:

$57924

Explanation:

(60000- 1200 x.98) + 300= $57924

3 0
3 years ago
Read 2 more answers
Jason is shopping at Hollister. Hollister has a sale: spend $100 saves 10%. If Jason buys clothes that costs $100, how much will
densk [106]

Answer:

$90

Explanation:

Hollister has an offer of 10%  savings for every purchase.

Jason buys clothes for $100. His savings will be 10% of $100

=10/100 x100

=0.1 x 100

=$10

Jason will pay

=$100 - $10

=$90

Jason will pay $90

8 0
3 years ago
You can receive 400,000 five years from today or 1,000,000 thirty years from today. what interest rate makes them equivalent?
deff fn [24]

Answer:

3.73%

Explanation:

The computation of the rate of interest that makes the equivalent is shown below:

As we know that

Present value=Cash flow × Present value discounting factor ( interest rate% , time period)

Let us assume the interest rate be x

where,

Present value of $400,000 is

= $400,000 ÷ 1.0x ^5

And,

Present value of $1,000,000 be

= $1,000,000 ÷ 1.0x^30

Now eqaute these two equations

$400,000 ÷ 1.0x^5 = $1,000,000 ÷ 1.0x^30

(1.0x^30) ÷ (1.0x^5) = $1,000,000 ÷ $400,000

1.0x^(30 - 5)=2.5

1.0x^25=2.5

1.0x = (2.5)^(1 ÷ 25)

x =1.03733158 - 1

= 3.73%

3 0
3 years ago
Other questions:
  • Mission Corporation reported the following equity section on its current balance sheet. The commonstock is currently selling for
    10·1 answer
  • J. Cole Went Platinum With No Features
    14·2 answers
  • You have the following rates of return for a risky portfolio for several recent years. Assume that the stock pays no dividends.
    7·1 answer
  • If your company increases its market penetration, what is happening?
    14·1 answer
  • Since it was founded in 1994, Amazon has expanded its business from online book sales, to online general retailing, to audio and
    11·1 answer
  • Wheeling company is a merchandiser that provided a balance sheet as of september 30 as shown below:
    7·1 answer
  • What will happen to a project's schedule if there are resource overloads and the critical path is delayed?
    14·1 answer
  • What areas are in a job want ad?
    10·1 answer
  • You won the lottery and may choose between Prize 1, which would pay you $50,000 today and $200,000 at the end of 10 years OR rec
    9·1 answer
  • What is an advantage for Freeman XP, a brand experience company that organizes large events such as trade shows, of hiring union
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!