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viva [34]
3 years ago
13

You have just retired with savings of $2 million. If you expect to live for 57 years and to earn 7% a year on your savings, how

much can you afford to spend each year (in $ dollars)
Business
1 answer:
galben [10]3 years ago
6 0

Answer:

Annual withdraw= $143,023.66

Explanation:

Giving the following information:

Present value (PV)= $2,000,000

Number of periods (n)= 57

Interest rate (i)= 7% a year

<u>To calculate the annual withdrawal, we need to use the following formula:</u>

Annual withdraw= (PV*i) / [1 - (1+i)^(-n)]

Annual withdraw= (2,000,000*0.07) / [1 - (1.07^-57)]

Annual withdraw= $143,023.66

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What is the standard deviation of a stock that has a 10% chance of earning 18%, a 10% chance of making 11%, a 40% chance of maki
Yakvenalex [24]

Answer:

A. 7.95%.

Explanation:

Calculate the expected rate of return for the investment as follows:

\begin{aligned}\text { Expected rate of return } &=(\text { Probability } \times \text { Rate of return })+(\text { Probability } \times \text { Rate of return })+\\&(\text { Probability } \times \text { Rate of retum }) \\=&(0.40 \times 15 \%)+(0.50 \times 10 \%)+(0.10 \times-3 \%) \\=& 0.06+0.05-0.003 \\=& 0.107

Calculate the standard deviation of the investment as follows:

\begin{aligned}\text { Standard deviation }=&\left\{\begin{array}{l} \text { Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)\end{array}\right.

=\sqrt{\left(0.40 \times(0.15-0.107)^{2}\right)+\left(0.50 \times(0.10-0.107)^{2}\right)+} \\=\sqrt{0.0007396+0.0000245+0.0018769} \\=\sqrt{0.002641} \\=0.05139066063011

7 0
3 years ago
Carly deposited $800 in an account that earns 6% compounded annually. Lara deposited $800 in an account that earns 6% simple int
LiRa [457]

Answer:

Carly will have $1,433 in her account at the end of 10 years.

Lara will have $1,280 in her account at the end of 10 years.

Explanation:

Simpe interest pays the simple trust on the principal amount. There is no reinvestment of interest.

In compounded Interest the Interest earned from the investment is reinvested and again interest on principal and interest amount reinvested is earned.

Carly Deposit balance

Principal amount = $800

Blance after 10 years = $800 ( 1+ 6% )^10 = $800 x 1.791 = $1,433

Lara Deposit balance

Principal amount = $800

Amount of Interest for 10 years = 800 x 6% x 10 = $480

Blance after 10 years = $800 + $480 = $1,280

7 0
3 years ago
The market analyst of a chain megastore bakery, called More Dough, asks you to find out why people are choosing to go to smaller
iren2701 [21]

Answer:

The market analyst is requesting you to perform a formal research.

Explanation:

Formal research is a research style used by researchers (and students) that uses a very formal structure in order to carry out a scientific research (or very similar type). Formal research obtains and analyzes data in a controlled and systematic manner, that tries to avoid subjective bias and focuses on objective information.

8 0
3 years ago
There are three
Lana71 [14]

The correct alternative is letter C. Inflation control. This is the first strategy to control the currency in the economy, being one of the main objectives of monetary policy in a country.

<h3 /><h3>What is monetary policy?</h3>

It is the set of governmental strategies and actions to interfere in the investment market and in the consumption power of citizens, through the control of the basic interest rate of the economy, which is an instrument capable of influencing the value of a currency and the prices of goods. consumption, thus generating a control over inflation in search of economic balance in a country.

Therefore, controlling inflation is a short-term measure that generates a series of impacts on an economy, such as fiscal and monetary contraction measures, such as increasing taxes and reducing public spending.

Find out more about monetary police here:

brainly.com/question/13926715

#SPJ1

8 0
2 years ago
Tax Savings. John and Cheryl just borrowed $30,000 on a home equity line of credit. The interest rate for the loan is 6.75% for
Sauron [17]

Answer:

$378

Explanation:

Interest expenses in current year = Amount of borrowing*Interest rate*8 month/12 months

Interest expenses in current year = $30,000 * 6.75% * 8/12

Interest expenses in current year = $1,350

Tax saving on interest expenses = Interest expenses * Tax rate

Tax saving on interest expenses = $1,350 * 28%

Tax saving on interest expenses = $378

So, their tax savings for the first year ending December 31 will be $378.

6 0
3 years ago
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