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
nadya68 [22]
3 years ago
5

You are planning to save for retirement over the next 25 years. To do this, you will invest $1,000 a month in a stock account an

d $700 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 7 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period
Business
1 answer:
STALIN [3.7K]3 years ago
3 0

Answer:

Monthly withdraw= $12,452.6

Explanation:

<u>First, we need to calculate the total accumulated at the moment of retirement. We will use the following formula:</u>

<u></u>

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

Stock:

Monthly investment= $1,000

Interest rate= 0.09/12= 0.0075

Number of periods= 25*12= 300 months

FV= {1,000*[(1.0075^300) - 1]} / 0.0075

FV= $1,121,121.94

Bond:

Monthly investment= $700

Interest rate= 0.06/12= 0.005

Number of periods= 25*12= 300 months

FV= {700*[(1.005^300) - 1]} / 0.005

FV= 485,095.77

Total FV= 1,121,121.94 + 485,095.77

Total FV= $1,606,217.71

<u>Now, the annual withdrawal:</u>

<u></u>

Interest rate= 0.07/12= 0.005833

Number of months= 12*20= 240

Monthly withdraw= (FV*i) / [1 - (1+i)^(-n)]

Monthly withdraw= (1,606,217.71*0.005833) / [1 - (1.005833^-240)]

Monthly withdraw= $12,452.6

You might be interested in
You were planning to spend Friday working at your part-time job, but a friend asks you to go kayaking.
N76 [4]

The statement that applies are the rental of ant kayak equipment you need the wages that you forgo by going kayaking and the fee for accessing the river in a national park

Explanation:

The true cost for going to a particular place includes all that costs that are included from moving to a place that includes all the wages and the vehicle cost

Here the opportunity costs includes the fee to go to the national park by crossing the river and the amount that is needed to be spent on the equipment and the wages that must be forgo by going to kayaking all these statements best includes the true costs of going to kayaking

7 0
3 years ago
In the text's business plan model, recognition of potentially unreliable sales forecasts and industry trends, and uncertain raw
bixtya [17]
Dont know this im sorry
8 0
3 years ago
Suppose the wholesale market for corn is a perfectly competitive market, and all firms in the corn industry are profit-maximizin
Ainat [17]

Answer:

Therefore option A is correct.

All firms selling corn must have the same MC regardless of each firms cost structure

Explanation:

In the perfectly competitive market, for profit maximization we set P = MC

In the perfectly competitive market, firms are price taker so demand curve is same for every firm and price is same too, so MC must be same for every firm

Therefore option A is correct ie. all firms selling corn must have the same MC regardless of each firms cost structure.

7 0
3 years ago
A company uses straight line depreciation for an item of equipment that cost $12000, had a salvage value of $2,000 and a five ye
timurjin [86]

Answer:

option (d) 2400

Explanation:

Data provided in the question:

Initial book value = $12,000

Salvage value = $2000

Useful life = 5 years

Thus,

Using the straight line method of depreciation

Annual depreciation = [Cost - Salvage value] ÷ Useful life

= [ $12,000 - $2,000 ] ÷ 5

= $2,000

Accumulated Depreciation for 3 years

= Annual depreciation × Time

= $2,000 × 3

= $6,000

Book value after 3 years = Cost - Accumulated depreciation

= $12,000 - $6,000

= $6,000

Remaining useful life = 2 years

Reduced Salvage value after 3 years = $1,200

Therefore,

Depreciable value of the Asset = Book value - Reduced salvage value

= $6,000 - $1,200

= $4,800

Revised depreciation to be charged every year

= Depreciable value of the Asset ÷ (Remaining useful life)

= $4,800 ÷ 2

= $2,400

Hence,

The correct answer is option (d) 2400

4 0
3 years ago
1. Take a look at the figure. The bodies of the lamps shown have harmony of
Doss [256]
D) scale
this should be the answer but if not then i don't know your teacher is teaching you haha
8 0
3 years ago
Other questions:
  • Because training is expensive it is important for an organization to:____________.
    15·1 answer
  • When the trial balance extracted from the books of Keman Enterprises at the year-end failed to balance, the difference was place
    10·1 answer
  • The expense recognition (matching) principle, as applied to bad debts, requires: Multiple Choice That bad debts not be written o
    15·2 answers
  • A performance obligation​ is: A. An enforceable promise in a contract with a customer to transfer a good or service to the custo
    9·2 answers
  • Which of the following competitive forces brings low prices, high costs, and low profits?
    5·2 answers
  • Sandra Sousa, Registered Dietician Trial Balance July 31, 2018 Balance Account Title Debit Credit Cash 33000 Accounts Receivable
    11·1 answer
  • In order to raise revenue in the city of Hamlet, the city considered assessing a local tax on food served in restaurants. When f
    6·1 answer
  • If the quantity demanded is greater than the quantity supplied, what will happen to the price?
    12·1 answer
  • Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that hi
    14·1 answer
  • Doing the work of the project is<br> part of which piece of<br> management?
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!