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
jeyben [28]
2 years ago
7

Peter wishes to create a retirement fund from which he can draw when he retires and the same amount at each anniversary of his r

etirement for years. He plans to retire years from now. What investment need he make today if he can get a return of per year, compounded annually
Business
1 answer:
uranmaximum [27]2 years ago
3 0

Answer:

$65,742.60

Explanation:

Note: The full question is <em>"Peter wishes to create a retirement fund from which he can draw $20,000 when he retires and the same amount at each anniversary of his retirement for 10 years. He plans to retire 20 years from now. What investment need he make today if he can get a return of 5% per year, com- pounded annually?"</em>

At first, we need to find the PV of withdrawals and there are 11 withdrawals starting 20 years from now.  

PV = PMT/r * 1 - 1/(1+r)^n. This formula gives the PV one period before the first withdrawal. That is 19 years from now because the first withdrawal is 20 years from now.

PMT = 20,000, n = 11,  

r = 0.05

PV19 = 20,000/0.05 * [1 - 1/(1+0.05)^11]

PV19 = 400,000 * 0.4153207109

PV19 = 166,128.28436

Now, we need to discount this back to toda

PV0 = PV19/(1 + r)^n; n = 19, r = 0.05

PV0 = 166,128.28436/(1 + 0.05)^1

PV0 = $65,742.6033421702

PV0 = $65,742.60

So, Peter needs to make $65,742.60 today.

You might be interested in
What federal agency is tasked with developing policies and procedures for emergencies that impact federal lands?
mariarad [96]
It can fall between Federal Emergency Management Agency (FEMA) or the U.S. National Guard (depends if the head of government for said state declared the are as in a state of emergency.<span />
3 0
3 years ago
The bank forecloses on Lisa's apartment complex. The property had been pledged as security on a nonrecourse mortgage, whose prin
skelet666 [1.2K]

Answer: $400,000

Explanation:

Based on the information given in the question, Lisa's recognized gain or loss will be calculated as the difference between the amount that's realized and the adjusted basis. This will be:

Recognized gain will be:

= Amount realized - Adjusted basis

= $900,000 - $500,000

= $400,000

There's a recognized gain of $400,000

6 0
3 years ago
The chart indicates the education or training histories of three employees in the Agriculture, Food, and Natural Resources caree
faust18 [17]

Answer: D

Explanation:

5 0
3 years ago
Read 2 more answers
Coleslaw cost $16.95 for a 5 kg pail. what is the cost for a 4 oz portion
sammy [17]

Answer: The cost for a 4 oz portion is 20$

Explanation:

Given : Cost of 5kg pail = 16.95$

To find : Cost of a 4 oz prtion = ?

Conversion factor : 1 kg = 35.274 oz

Thus cost of 35.274 oz = 176.37$

Then cost of 4oz =\frac{176.37}{35.274}\times 4=20$

Thus cost for a 4 oz portion is 20$

5 0
3 years ago
A bank purchased a credit default swap from another financial institution to protect itself against the default of one of its bo
Vedmedyk [2.9K]

Answer: Hedging

Explanation: because the bank is hedging when it purchases a credit default swap that is offering protection against the default of one of its borrowers.

6 0
2 years ago
Other questions:
  • Oceanview marine company performance materiality question
    5·1 answer
  • The health care workforce during the current market-driven changes is experiencing: A. Significant expansion at professional lev
    11·1 answer
  • If the primary key of the workshop offerings table contains the primary key for both the workshop table and account table, there
    11·1 answer
  • According to Charles Cresson Wood, "Reporting directly to top management is not advisable for the Information Security Departmen
    6·1 answer
  • Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the
    8·1 answer
  • Thompson argues that civil liberties thrive only when the public demands them and understands that they are at risk of losing th
    11·1 answer
  • The 2014 balance sheet of Jordan’s Golf Shop, Inc., showed long-term debt of $2.7 million, and the 2015 balance sheet showed lon
    5·1 answer
  • An industry has 5 firms. Firm A has 30% of the market, Firm B and Firm C each have 25% of the market, Firm D has 15% of the mark
    8·1 answer
  • What sup i am newwwwwww
    5·1 answer
  • What enables a oligopoly to form within a market
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!