Purchase Solution

Retirement

Not what you're looking for?

Ask Custom Question

A: You plan to retire in 30 years and want to accumulate enough by then to provide yourself with $30000 a year for 15 years. If the interest rate is 10% by how much must you accumulate by the time you retire?

B: How much must you save each year until retirement in order to finance your retirement consumption?

C: Now you remember that the annual inflation rate is 4%. If a loaf f bread costs $1 today, what will it cost by the time you retire?

D: You really want to consume $30,00 a year in real dollars during retirement and wish to save an equal real amount each year until then. What is the real amount of saving that you need to accumulate by the time you retire?

E: Calculate the required preretirement real annual savings necessary to meet your consumtion goals. Compare to your answer (b). Why is there a difference?

F: What is the nominal value of the amount you need to save during the first year? ( Assume the savings are put aside at the end of each year.) The thirtieth year?

Purchase this Solution

Solution Summary

This solution is comprised of step-by-step calculation for the following questions:

A: You plan to retire in 30 years and want to accumulate enough by then to provide yourself with $30000 a year for 15 years. If the interest rate is 10% by how much must you accumulate by the time you retire?

B: How much must you save each year until retirement in order to finance your retirement consumption?

C: Now you remember that the annual inflation rate is 4%. If a loaf f bread costs $1 today, what will it cost by the time you retire?

D: You really want to consume $30,00 a year in real dollars during retirement and wish to save an equal real amount each year until then. What is the real amount of saving that you need to accumulate by the time you retire?

E: Calculate the required preretirement real annual savings necessary to meet your consumtion goals. Compare to your answer (b). Why is there a difference?

F: What is the nominal value of the amount you need to save during the first year? ( Assume the savings are put aside at the end of each year.) The thirtieth year?

Purchase this Solution


Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.