Insurance and Pension Funds
Not what you're looking for?
Need help with these 2 problems.
6. A client needs assistance with retirement planning. Here are the facts
 The client, Dave is 21 years old. He wants to retire at 65.
 Dave has disposable income of $2,000 per month.
 The IRA Dave has chosen has an average annual of 8%
If Dave contributes half of his disposable income to the account, what will it be worth at 65? How much would he need to contribute to have $5,000,000 at 65?
7. When opening an IRA account, investors have two options. With a regular IRA account, funds added are not taxed initially, but are taxed when withdrawn. With a Roth IRA, the funds are taxed initially, but not when withdrawn. If an investor wants to contribute $15,000 before taxes to an IRA, what will be the difference after 30 years between the two options? Assume that the investor is currently in the 25% tax bracket, and that the IRA will earn 6% per year.
Purchase this Solution
Solution Summary
The solution explains the future value calculations of an annuity and contributions to an IRA account.
Solution Preview
6. A client needs assistance with retirement planning. Here are the facts
 The client, Dave is 21 years old. He wants to retire at 65.
 Dave has disposable income of $2,000 per month.
 The IRA Dave has chosen has an average annual of 8%
If Dave contributes half of his disposable income to the account, what will it be worth at 65? How much would he need to contribute to have $5,000,000 at 65?
The half of the disposalble income is $1,000 per month. The total time period from 21 years to 65 years is 44 years or 528 months. The interest rate is 8% per annum so it is 8/12=0.6667% per month. The ...
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.