« previous next »

Author Question: In their meeting with their advisor, Mr. and Mrs. O'Rourke concluded that they would need 40,000 per ... (Read 99 times)

Wadzanai

  • Hero Member
  • *****
  • Posts: 528
on: Jul 10, 2018
In their meeting with their advisor, Mr. and Mrs. O'Rourke concluded that they would need 40,000 per year during their retirement years in order to live comfortably. They will retire 10 years from now and expect a 20-year retirement period.
 
  How much should Mr. and Mrs. O'Rourke deposit now in a bank account paying 9 percent to reach financial happiness during retirement?

Question 2

To achieve the goal of profit maximization for each alternative being considered, a financial manager would select the one that is expected to result in the highest return.
 
  Indicate whether the statement is true or false


akpaschal

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jul 10, 2018
Answer to Question 1

The amount of money required at the beginning of the retirement period is:
n = 20, i = 9
PVA = (CF/r)  1-1/(1+r)n = (40,000/.09 )  1-1/(1.09 )20= 365,142
n = 10, i = 9
PV = 365,142(1.09 )-10 = 154,239.85

Answer to Question 2

TRUE


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

Did you know?

Pope Sylvester II tried to introduce Arabic numbers into Europe between the years 999 and 1003, but their use did not catch on for a few more centuries, and Roman numerals continued to be the primary number system.

In 1839 Mary Cragin, at the age of twenty-nine, became a convert to John Humphrey Noyes’s “communism In 1839 Mary Cragin, at the age of twenty-nine, became a convert to John Humphrey Noyes’s “communism
Edward Bellamy, author of the utopian novel Looking Backward (1888) Bellamy’s socialism worried many Edward Bellamy, author of the utopian novel Looking Backward (1888) Bellamy’s socialism worried many
A quality assurance (QA) committee meeting. A quality assurance (QA) committee meeting.
A medical assistant at a QA meeting. A medical assistant at a QA meeting.
Example of Staff Meeting Agenda Example of Staff Meeting Agenda
Food Sources When it comes to meeting your vitamin K needs, think green Food Sources When it comes to meeting your vitamin K needs, think green
Video: Mitosis step-by-step

For a complete list of videos, visit our video library