You have accumulated some money for your retirement. You are going to withdraw $92,645 every year...
Question:
You have accumulated some money for your retirement. You are going to withdraw $92,645 every year at the beginning of the year for the next 19 years, starting today. Your account pays you 12.9% per year, compounded annually.
How much money have you accumulated for your retirement? To answer this question, you have to find the present value of the cash flows.
Present value of annuity due:
The present value of annuity due is the present value of periodic payments to be received for a specified number of periods. It differs from ordinary annuity in a way that the payments are received at the beginning of each period rather than at the end.
Answer and Explanation: 1
The present value of annuity due can be represented as:
{eq}PV= C+C\times \frac{1-(1+r)^{-(n-1)}}{r} {/eq}
Where:
C is the payment per period = $92,645
r is the rate per period = 12.9% or 0.129
n is the number of periods = 19
Substituting the values we have:
{eq}PV= $92,645 + ( $92,645 \times \frac{1-(1+0.129)^{-(19-1)}}{0.129}) {/eq}
{eq}PV= $ 92,645 + $ 637,316.88 {/eq}
{eq}PV= $ 729,961.88 {/eq}
Hence you must have accumulated $729,961.88
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
How to Find the Value of an Annuity
from
Chapter 21 / Lesson 15
9.4K
An annuity is a type of savings account that pays back the investor in the future. Learn the formula used to calculate an annuity's value, and understand the importance of labeling specific numbers to calculate an output over time.
Related to this Question
- You have accumulated some money for your retirement. You are going to withdraw $60,554 every year at the beginning of the year for the next 29 years, starting today. Your account pays you 17.81 percen
- You have accumulated some money for your retirement. You are going to withdraw $81,756 every year at the beginning of the year for the next 24 years, starting today. Your account pays you 18.24 percen
- You have accumulated some money for your retirement. You are going to withdraw $99790 every year at the beginning of the year for the next 20 years, starting today. Your account pays you 9.1 percent p
- You have accumulated some money for your retirement. You are going to withdraw $71,493 every year at the beginning of the year for the next 15 years, starting today. Your account pays you 9.91 percent per year, compounded annually. How much money have you
- You have accumulated some money for your retirement. You are going to withdraw $56,545 at the beginning of every year for the next 22 years, starting today. Your account pays you 14.87 percent per yea
- You currently have $100,000 in a retirement account earning 10% per year. You can deposit an additional $5,000 per year for the next 7 years. If you leave that money in the account for another 8 years, how much will you have 15 years from now?
- You have accumulated some money for your retirement. You are going to withdraw $83,102 every year at the beginning of the year for the next nineteen years starting from today. How much money have you accumulated for your retirement? Your account pays you
- You have accumulated some money for your retirement. You are going to withdraw $74,959 every year at the beginning of the year for the next 16 years starting from today. How much money have you accumulated for your retirement? Your account pays you 13.41
- You have accumulated some money for your retirement. You are going to withdraw $83,102 every year at the beginning of the year for the next 19 years starting from today. How much money have you accumulated for your retirement? Your account pays you 11.67
- You have accumulated some money for your retirement. You are going to withdraw $50,311 every year at the beginning of the year for the next 29 years starting from today. How much money have you accu
- You have accumulated some money for your retirement. You are going to withdraw $57,103 every year at the beginning of the year for next 18 years starting from today. How much money have you accumulate
- You deposit $3,000 per year at the end of each of the next 30 years into an account that pays 7% compounded annually towards your retirement. Once you retire, you will withdraw your retirement savings in 15 annual end-of-year installments, if the accumula
- You have accumulated some money for your retirement. You are going to withdraw $87,479 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $98,624 every year at the end of the year for the next 18 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $89,019 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $96,020 every year at the beginning of the year for the next 24 years starting from today. How much money have you accumu
- You have accumulated some money for your retirement. You are going to withdraw $91,026 every year at the beginning of the year for the next 18 years starting from today. How much money have you accumu
- You have accumulated some money for your retirement. You are going to withdraw $74,750 every year at the beginning of the year for the next 17 years starting from today. How much money have you accumu
- You have accumulated some money for your retirement. You are going to withdraw $98,190 every year at the beginning of the year for the next 29 years starting from today. How much money have you accumu
- You have accumulated some money for your retirement. You are going to withdraw $81,452 every year at the beginning of the year for the next 21 years starting from today. How much money have you accumu
- In planning for your retirement, you would like to withdraw $70,000 per year for 11 years. The first withdrawal will occur 20 years from today. a)What amount must you invest today if your return is 1
- You have accumulated some money for your retirement. You are going to withdraw $77,256 every year at the beginning of the year for the next 15 years. How much money have you accumulated for your retir
- You are going to retire 30 years from now and plan to live for another 25 years. You can earn 8% on your investment for the next 55 years. You just deposited $15,000 into the investment account. You w
- You have $50,000 in a retirement account, and you plan to deposit $3,000 at the end of every year until your account reaches $250,000. You expect to earn 6% annually on your savings. How many years will you have to work before you retire? a. 8 b. 10 c.
- You have accumulated some money for your retirement. You are going to withdraw $53975 every year at the end of the year for the next 30 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $93,574 every year at the end of the year for the next 19 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $59,573 every year at the end of the year for the next 18 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $45,500 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $73,508 every year at the end of the year for the next 17 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $5,9623 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $61,746 every year at the end of the year for the next 28 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $92,965 every year at the end of the year for the next 17 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $88,907 every year at the end of the year for the next 29 years. How much money have you accumulated for your retirement?
- You have accumulated some money for your retirement. You are going to withdraw $81,167 every year at the end of the year for the next 15 years. How much money have you accumulated for your retirement?
- You are planning to retire 25 years from today. You want to be able to withdraw $60,000 per year for 20 years of retirement, with each withdrawal being taken at the beginning of each year. You have already accumulated savings of $90,000 as of today (t=0).
- You want to deposit $X in your retirement account today. You plan to retire in 35 years and make your first withdrawal from your account (at time 35) of $100,000; you will make 19 additional annual wi
- You plan to retire in 40 years. You want to begin funding your retirement savings account immediately and will also do so at the beginning of February for the next 39 years (40 deposits in total). You would like to have $2,000,000 in your account at that
- You are planning on retiring for retirement 34 years from now. You plan to invest $4,200 per year for the first 7 years, $6,900 per year for the next 11 years, and $14,500 per year for the following 1
- I plan to deposit $475 into my retirement every year for the next 25 years. The first deposit will be made today that is, at t=0 and the last deposit will be made at the end of year 24 that is at t=24
- You plan on retiring in 20 years. You currently have $275,000 and think you will need $1,000,000 to retire. Assuming that you do not deposit any additional money into the account, what annual return w
- You are planning your retirement in 10 years. You currently have $169,000 in a bond account and $609,000 in a stock account. You plan to add $7,100 per year at the end of each of the next 10 years to
- You plan to retire 33 years from now. You expect that you will live 27 years after retiring. You want to have enough money upon reaching retirement age to withdraw $50,000 from the account at the beginning of each year you expect to live, and yet still ha
- In planning for your retirement, you would like to withdraw $80,000 per year for 18 years. The first withdrawal will occur 20 years from today. 1. What amount must you invest today if your return is 1
- In planning for your retirement, you would like to withdraw $80,000 per year for 20 years. The first withdrawal will occur 20 years from today. a. What amount must you invest today if your return is
- You are planning your retirement in 10 years. You currently have $161,000 in a bond account and $601,000 in a stock account. You plan to add $7,900 per year at the end of each of the next 10 years to
- You are planning your retirement in 10 years. You currently have 172,000 in a bond account and 612,000 in a stock account. You plan to add $6,800 per year at the end of each of the next 10 years to yo
- You plan to retire 40 years from now. After retirement you want to be able to withdraw $20,000 annually at the end of each year from retirement account for 20 years. You plan to save a given amount of
- A man aged 40 wishes to accumulate a fund for retirement by depositing $1,000 at the beginning of each year for 25 years. Starting at age 65, he will make 15 annual withdrawals at the beginning of eac
- You have accumulated $800,000 for your retirement. How much money can you withdraw in equal annual beginning-of- the-year case flows if you invest the money at a rate of 7% for thirty years?
- You plan on retiring at the end of forty years. You plan on making an equal deposit at the end of each year in an account earning 10%. You want to be accumulated enough money so that you can withdraw $500,000 at the end of each year for 25 years during re
- You are going to pay $800 into an account at the beginning of each of 20 years. The account will then be left to compound for an additional 20 years until the end of year 40 when it will turn into a p
- In planning for your retirement, you would like to withdraw $40,000 per year for 15 years. The first withdrawal will occur 20 years from today. a. What amount must you invest today if your return is 10% per year? b. What amount must you invest today if
- In planning for your retirement, you have decided that you would like to be able to withdraw $60,000 per year for a 10 year period. The first withdrawal will occur 20 years from today. a. What amount
- With $1.5 million in an account expected to earn 8% annually over the retiree's 30 years of life expectancy, what annual annuity can be withdrawn, beginning today? a. $112,148.50 b. $120,000.00 c. $123,371.44 d. $133,241.15
- With $1.5 million in an account expected to earn 8% annually over the retiree's 30 years of life expectancy, what annual annuity can be withdrawn, beginning today?
- With $1.2 million in an account expected to earn 9% annually over the retiree's 30 years of life expectancy, what annual annuity can be withdrawn, beginning today?
- An amount, P, must be invested now to allow withdrawals of $1,000 per year for the next 15 years and to permit $320 to be withdrawn starting at the end of year 5 and continuing over the remainder of t
- You plan to retire 38 years from now. You expect that you will live 25 years after retiring. You want to have enough money upon reaching retirement age to withdraw $100,000 from the account at the end of each year you expect to live, and yet still have $1
- You have just made your first $10,000 contribution to your retirement account. Assuming you earn 10% per year and make no additional contributions, what will your account be worth when you retire in 4
- You want to be able to withdraw $25,000 from your account each year for 20 years after you retire. If you expect to retire in 15 years and your account earns 7.8% interest while saving for retirement
- A friend of yours plans to begin saving for retirement by depositing $2,000 at the end of each year for the next 25 years. If she can earn 10% annually on her investment, how much will she have accumulated at the end of 25 years?
- You are planning for retirement 34 years from now. You plan to invest $4,200 per year for the first 7 years, $6.900 per year for the next 11 years, and $14,500 per year for the following 16 years (ass
- 1. You are planning for retirement 34 years from now. You plan to invest $4,200 per year for the first 7 years, $6,900 per year for the next 11 years, and $14,500 per year for the following 16 years (
- You are 29 years old and decide to start saving for your retirement. You plan to save $4,500 at the end of each year (so the first deposit will be one year from now) and will make the last deposit when you retire at age 67. Suppose you earn 10% per year o
- You are 36 years old and decide to start saving for your retirement. You plan to save $4,500 at the end of each year (so the first deposit will be one year from now) and will make the last deposit when you retire at age 67. Suppose you earn 10% per year o
- You are 29 years old and decide to start saving for your retirement. You plan to save $5,000 at the end of each year (so the first deposit will be one year from now) and will make the last deposit whe
- You are 26 years old and decide to start saving for your retirement. You plan to save $5,500 at the end of each year (so the first deposit will be one year from now) and will make the last deposit whe
- You are 29 years old and decide to start saving for your retirement. You plan to save $6,500 at the end of each year? (so the first deposit will be one year from now), and will make the last deposit w
- You are 27 years old and decide to start saving for your retirement. You plan to save $4,000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit wh
- You deposit $1,000 in a retirement account today at 8.5 percent interest. How much more money will you have if you leave the money invested for 40 years rather than 35 years?
- You have just received an endowment and placed this money in a savings account at an annual rate of 19.74%. You are going to withdraw the following cash flows for the next five years. End of year: 1
- You have just received an endowment and placed this money in a savings account at an annual rate of 10.42%. You are going to withdraw the following cash flows for the next five years. Year 1 $4,826 Ye
- Deryl wishes to save money to provide for his retirement. Beginning one year from now, he will begin depositing the same fixed amount each year for the next 30 years into a retirement savings account. Starting one year after making his final deposit, he w
- You are saving for retirement in 40 years. You deposit $20,000 in a bank account today that pays 2.5% interest, compounded semiannually. You leave those funds on deposit until you retire. You also contribute $5,000 a year to a pension plan for 20 years an
- You have forty years until you retire. Today, you have no investments. At the end of the year, you will make the first of 40 annual investments of $5,000 in an account that returns 8%, how much will y
- You have thirty years until you retire. Today you have no investments. At the end of the year, you will make the first of 30 annual investments of $5,000 in an account that returns 6%. How much will y
- You deposit $ 20,000 into a saving account and leave it for 20 years. Interest = 12% . At the end of year 21, you make a withdrawal and withdraw the same amount at the end of each year until the end o
- You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The annual return of the stock account i
- You are now 20 years old and just beginning to save for retirement. If your retirement account will earn 6% compounded monthly and you plan to retire at the age of 50 with $1,200,000. How much do you
- You are ready to retire. A glance at your 401(k) statement indicates you have $750,000. If the funds remain in an account earning 9.0%, how much could you withdraw at the beginning of each year for the next 25 years? A) $35,830 B) $2,500 C) $70,050 D) $55
- Frode is planning for retirement 34 years from now. He plans to invest $4,200 per year for the first 7 years, $6,900 per year for the next 11 years, and $14,500 per year for the following 16 years (assume all cash flows occur at the end of each year). If
- 4) You are saving for retirement in 20 years. Today, you place $100,000 in a bank account that pays 4% interest, compounded annually, leaving the funds on deposit for the entire 20 years. You also con
- You are going to pay $600 into an account at the beginning of each of 20 years. The account will then be left to compound for an additional 20 years. At the end of the 41st year, you will begin receiving a perpetuity from the account. If the account pays
- Mr. D. plans to retire exactly twenty years from now (t=0), and he would like to have accumulated by retirement, enough money to enjoy a $100,000 per year retirement income beginning in year 21 and co
- You are now 30 years old and would like to accumulate $2,000,000 in your retirement account at age 65. You currently have $50,000 saved in the retirement account. How much must you set aside at the end of each year over the next 35 years to attain your re
- You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month is a stock account and $500 in a bond account. The return on the stock account is expected to
- You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account and $350 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 25 years. To do this, you will invest $820 per month in a stock account and $420 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 25 years. To do this, you will invest $500 a month in a stock account and $200 a month in a bond account. The return of the stock account is expec
- You are planning to save for retirement over the next 20 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expec
- You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account and $250 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 25 years. To do this, you will invest $880 per month in a stock account and $480 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 25 years. To do this, you will invest $700 per month in a stock account and $300 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 35 years. To do this, you will invest $770 per month in a stock account and $370 per month in a bond account. The return of the stock account is e
- You are planning to save for retirement over the next 25 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expec
- You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a month in a stock account, and $350 per month in a bond account. The return of the stock account is ex
Explore our homework questions and answers library
Browse
by subject