Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose that you are planning for retirement. you

Suppose that you are planning for retirement. You want to have exactly $4 million dollars when...

70.2K

Verified Solution

Question

Finance

Suppose that you are planning for retirement. You want to haveexactly $4 million dollars when you retire. You just turned 26 andplan to retire on your 65th birthday. For the next 15years, you can save $10,000 per year (with the first deposit beingmade one year from now), and at the end of that time (t=15) youplan to buy a car for your child as a gift that will cost$50,000.   How much will you have to save each year inyears 16 until retirement so that you meet your retirement goal?Assume the discount rate is 10 percent per year.

Answer & Explanation Solved by verified expert
3.7 Ratings (507 Votes)
You want to have exactly 4 million dollars when you retire therefore future value of your deposits at the time of retirement FV 4 million Discount rate or Interest rate 10 per year Time period for retirement n 39 years 65 years 26 years For the next 15 years you can save 10000 per year we can use FV of an Annuity formula to calculate the future value of after    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

The information on the following page was obtained from therecords of Breanna, Inc.:Accounts receivable...The...

Basic Math
1.2K views

Going back to problem 1, in real life you can, without much difficulty, get the mean...

Biology
1.2K views

In a paragraph, relate the following terms:  Metabolism, anabolism, catabolism, hydrolysis, condensation, endergonic, exergonic.   Relate means group those terms...

Physics
1.2K views

white printer paper have an equal mass, but unequal surface area coffee filters have an equal surface...

Basic Math
1.2K views

A plane traveled 1120 miles to Cheyenne and back. The trip there was with the...

Algebra
1.2K views

Find the QR decomposition of the matrix M 1 25 7 2 3 21 1...

Algebra
1.2K views

Find the equation of a line in General Form 8 passes through the points 5...

Accounting
1.2K views

ESSENTIALS OF MANAGEMENT ACCOUNTING 15 OCTOBER 2020 PMA01964 Question 2 The following company uses process...

Accounting
1.2K views

Current Attempt in Progress Inventory information for Part 311 of Swifty Corp. discloses the...

Accounting
1.2K views

Monica's Mantles expects to sell 22,000 mantles for $125 each next year. The cost for...

Accounting
1.2K views

Barber Company will receive $900,000 in 7 years. If the appropriate interest rate is 10%,...

Accounting
1.2K views

QUESTION 18 The criteria used by an external auditor to evaluate published financial statements in...