« previous next »

Author Question: In their meeting with their advisor, Mr. and Mrs. O'Rourke concluded that they would need 40,000 per ... (Read 115 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?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Cancer has been around as long as humankind, but only in the second half of the twentieth century did the number of cancer cases explode.

Did you know?

Blood is approximately twice as thick as water because of the cells and other components found in it.

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: Glycolysis - and oxygen

For a complete list of videos, visit our video library