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Time value of money

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Your brother is 55 years old now and his current savings declined to $500000 and he does not feel this is sufficient ,so he works for another 10 years to retire at age 65.He expects to live for another 20 years after he retires he wants to have $100000 to live on each of the 20 years ,the first payment occuring at the time of retirement at 65 years. He will the recieve an additional payment each year for more 19 years . His account will pay 5% annually.

1. How much he should accumulated into his account on the date of retirement 65 to be able to make payments ?

2.How much must he put aside each of next 10 years to achieve this if the payments are made at the end of year starting on his 56 th birthday and his $500000 is still safe.

3.Assume that yours brother is only 45 and he has 20 years to make payments before retiring .how much would he have had to put aside each of the 20 years to achieve his retirement goal?The payments are made at the end of the year starting on 46 th birthday.

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Your brother is 55 years old now and his current savings declined to $500000 and he does not feel this is sufficient ,so he works for another 10 years to retire at age 65.He expects to live for another 20 years after he retires he wants to have $100000 to live on each of the 20 years ,the first payment occuring at the time of retirement at 65 years.He will the recieve an additional payment each year for more 19 years .His account will pay 5% annually.

1. How much he should accumulated into his account on the date of retirement 65 to be able to make payments ?

We have to calculate the present value of annuity due
annuity = $100,000 ...

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Answers time value of money questions

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1) You invest $20,000 today, at a rate of 10% compound quarterly. What will the investment be worth at the end of year twenty?
2) You are offered an annuity that will pay you $9,000 at the end of each of the next 10 years. What is the maximum amount you would be willing to pay today for this annuity? (Assume you require a 15% rate of return on an investment of this nature.)
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4) You want to start saving for your child's education. You project that your child will need $170,000 to attend school 15 years from now. If you can earn a rate of return of 10% compounded semi-annually on a given investment, what dollar amount will you need to invest today to ensure your child can attend college?
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9) While Bob Jones was a student at Tiffin University, he borrowed $43,063 in student loans at an annual rate of 7 percent. If Bob repays $500 per month, how long, to the nearest year, will it take him to repay the loan?
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