Your 75-year-old grandmother expects to live for another 15 years. She currently has $1,000,000 of savings, which is invested to earn a guaranteed 5% rate of return. If inflation averages 2% per year, how much can she withdraw (to the nearest dollar) at the beginning of each year and keep the withdrawals constant in real terms, i.e., growing at the same rate as inflation and thus enabling her to maintain a constant standard of living?

Answers

Answer 1

Based on your grandmother's savings, her rate of return, and inflation, the amount she can withdraw at the beginning of each year is $81,027.

What is annuity?

An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

The grandmother can withdraw at the beginning of each year

First, find the inflation adjusted return,

1 + Adjusted return = (1 + nominal return) / (1 + inflation rate)

1 + Adjusted return = 1.05 / 1.023

Adjusted return = 2.94%

Using the PMT function on the spreadsheet, the amount to be withdrawn can be found:

Rate = 2.9%

Nper = 15 years

PV = - 1,000,000

Type = 1 (Withdrawal at year beginning)

Amount will be found as $81,027.

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Related Questions

Suppose you want to borrow money from banks. You are considering
two loans. The terms of them are equivalent with the exception of the interest
rates. Loan A offers a rate of 7.75 percent, compounded daily. Loan B offers a
rate of 8 percent, compounded semi-annually. Which loan should you select and
why?

Answers

The loan I would select is loan A. This is because it has a lower effective annual rate.

Which loan would I select?

The loan I would select would be the cheaper one.  In order to determine the cheaper loan, I would calculate the effective annual rate. The effective annual rate is the actual interest rate that is paid on a loan.

Effective annual rate = (1 + APR / m ) ^m - 1

Where: M = number of compounding

Loan A = ( 1 + 0.0775/365)^365 - 1 = 8.06%

Loan B = (1 + 0.08/2)^2 - 1 = 8.16%

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Which one of the following will not cause a change in the demand for labour, illustrated by a shift of the demand curve?

A.
A decrease in the number of employers

B.
A decrease in the wage rate

C.
An increase in the price of the product

D.
A decrease in the productivity of labour

Answers

Answer:

B. An increase in the wage rate

Explanation:

Commercial banks hold deposits and ______ a. charge account holders interest b. pay account holders interest c. charge savers interest d. issue currency e. pay borrowers interest

Answers

A commercial bank holds deposits and pays account holders' interests at regular intervals. Hence, the correct choice is option B.

What is a commercial bank?

A commercial bank is an institution that is established as a profit financial organization that accepts deposits, gives loans, and presents different financial services to its customers.

Commercial banks assist satisfy the medium- and short-time period monetary necessities of businesses.

Hence, A commercial bank holds deposits and pays account holders' interests at regular intervals. the correct choice is option B.

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According to current State Farm guidelines, it's acceptable to specify aftermarket/non-OEM sheet metal
(i.e. hoods, fenders, deck lids) on State Farm estimates
O True
O False

Answers

"According to current State Farm guidelines, it's acceptable to specify aftermarket/non-OEM sheet metal (i.e. hoods, fenders, deck lids) on State Farm estimates" The statement is false. This is further explained below.

What is State Farm guidelines?

Generally, State Farm guidelines is simply defined as  established universal norms for conduct that are consistent with the ethos of these groups.

In conclusion, We have established universal norms for conduct that are consistent with the ethos of these groups.

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it takes 1 hour to travel from new york to Washington dc by air and 4 hours by train The airfare is 200 and the train fare is 85
If a traveler wishes to minimize the total cost of making this trip, which mode of transportation should be selected if the traveler’s opportunity cost of time spent in transit is $15 per hour?

Answers

If a traveler wishes to minimize the total cost of making this trip is $85 train travel that will at minimum cost.

What is opportunity cost?

The potential profit lost from a missed chance is referred to as the “opportunity cost” and is the result of selecting one option over another.

Additional hours = 4 – 1 = 3 hours

Additional cost = 3×10 = $30

Total cost = 85+30 = $115

Cost of air travel = $200

Savings due to train travel = 200 – 115

= $85

Therefore, $85 is the correct answer.

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Requirements for a good code of ethics grade 11

Answers

Answer:

Don't be bad, help others.

Explanation:

On July 1, Aloha Co. exercises a call option that requires Aloha to pay $408,000 for its outstanding bonds that have a carrying value of $416,000 and a par value of $400,000. The company exercises the call option after the semiannual interest is paid the day before on June 30. Record the entry to retire the bonds.

Answers

The journal entry for the retirement of bonds will affect a debit to Bonds Payable and Premium on bonds payable accounts for an amount of $400,000 and $12,000 respectively; and a credit in the balances of Cash and Gain on retirement of bonds accounts for a sum of $408,000 and $4,000 respectively.

What is journal entry?

The systematic manner of record-keeping of financial transactions in a business in the chronological order of their occurrence is known as a journal entry. A journal entry has an equal amount of debit and credit effects.

Hence, the significance of a journal entry has been aforementioned.

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According to the AHDI, capitalize the name of a genus when used in the plural. true or false

Answers

It is FALSE to state that according to the AHDI, one must capitalize the name of a genus when used in the plural.

What is the AHDI standard for capitalizing a genus?

According to the American Association for Medical Transcription (AHDI), the name of a genus or some genera (the plural of genus) should always be capitalized and italicized.

The implication is that the name of a genus is always capitalized whether used in the plural or singular.

Thus, it is FALSE to conclude that according to the AHDI, one must capitalize the name of a genus when used in the plural.

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Why is it important to establish a theme and message to use across all
promotional activities?
A. Using the same theme and message in each promotional piece
means that your overall campaign will be effective.
OB. Using the same theme and message across all promotional
activities means that you don't have to come up with a
coordinated goal.
OC. By repeating the same basic thrust of your message in each
promotional piece, consumers will identify you with that message.
W
D. By sticking with one theme for all promotional activities, you
ensure that you reach your target audience.

Answers

Answer: C

Explanation:

By repeating the same basic thrust of your message in each

promotional piece, consumers will identify you with that message.

Answer:

C. By repeating the same basic thrust of your message in each

promotional piece, consumers will identify you with that message.

Explanation: It makes the most sense

what is local business​

Answers

A local business is a busses that sells its products and services to consumers in its own city or town.
a local business is a business that is pretty common and sells its own products to the public that is pretty familiar nor close.

What can a producer gain by specializing?

Answers

Answer:

Absolute advantage.

Explanation:

A producer are gain an absolute advantage from specializing.

[Correct Me If I'm Not Correct]

"Keep Safe"

"Hope's It's Help"

Answer:

Absolute advantage.

Explanation:

A producer are gain an absolute advantage from specializing.

[Correct Me If I'm Not Correct]

Production is efficient if the economy is producing at a point
Oon the production possibilities frontier.
O outside the production possibilities frontier.
Oon or inside the production possibilities frontier.
O inside the production possibilities frontier.

Answers

Production is efficient when the economy is producing at a point on the production possibilities frontier. Hence, Option 1. is the correct statement.

What is the production possibilities frontier?

A production possibilities frontier, or PPF, defines the set of feasible mixtures of products and offerings a society can produce given the sources available. Choices outside the PPF are unattainable and alternatives within the PPF are inefficient.

Therefore, Production is efficient when the economy is producing at a point on the production possibilities frontier. Option 1. is the correct statement.

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what is the market and sales strategy of vending machine

Answers

Answer:

The sales strategy of a vending machine is the four p's and those four p's are Product, Price, Place, and Promotion

Explanation:

hope this help pls give brainiest

financial
Question7
A flexible manufacturing system is

Answers

A flexible manufacturing system is a production method that is designed to easily adapt to changes in the type and quantity of the product being manufactured.

Answer:

A flexible manufacturing system (FMS) is a production method that is designed to easily adapt to changes in the type and quantity of the product being manufactured.

Assuming that the money market, the foreign exchange market, and the secondary market for securities are functioning correctly, there will be economic growth.

True or False

Answers

Answer:

true

Explanation:

The foreign exchange market involves firms, households, and investors who demand and supply currencies

which is a short term low risk investment with low liquidity

Answers

A mutual fund investment is an example of a short term low risk investment with low liquidity

What is a mutual fund?

This is a money market investment that has low risk, low return and low liquidity which can be done for say one year or more according to the investor's choice.

Hence, he mutual fund investment is an example of a short term low risk investment with low liquidity.

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3. Which pair of fields must contain unique values for every name entry?
a. CUSTOMER TYPE and COMPANY NAME.
b. VENDOR TYPE and FULL NAME.
C. CUSTOMER NAME and VENDOR NAME.
d. COMPANY NAME and FULL NAME.​

Answers

CUSTOMER NAME and VENDOR NAME must contain unique values for the entry of name in the data sheet.

Who is a customer?

Someone who buys or purchases a commodity from a seller with an intention to consume or resell such product to someone else at a given price or quantity is known as a customer.

Every consumer is a customer, but every customer is not a consumer. A vendor, on the other hand, is an individual who deals in commodities to be sold to their customers at a given price or quantity.

Hence, option C holds true regarding a customer.

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Question 7 of 10
An example of an expenses that is not an allowable tax deductions is:
A. A hospital bill
OB. A donation to a charity
OC. An all inclusive vacation
OD. Home mortgage interest

Answers

All-inclusive vacations are not an example of expenses that are not allowable tax deductions.

What are the tax deductions allowed?

They correspond to a form of exemption and credit in taxation, such as interest on a home mortgage, unreimbursed healthcare costs and charitable donations.

Therefore, tax deductions contribute to a reduction in taxable income and in the amount of taxable tax.

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Answer:

the answer is C.

Explanation:

Alpha Software Inc. made an advance rent payment of $6,000 for its warehouse. The accounting period for which the company paid the rent was from January to June 2014. The accountant recorded a rent payment of $1,000 in the month of January, 2014. Which accounting principle guides this action? A. accounting periodicity B. matching principle C. historical cost D. business entity

Answers

Based on the fact that the accountant recorded the rent payment for the month of January, the principle here is the B. matching principle.

What is the matching principle?

The matching principle calls for apportioning expenses to the period they were incurred so that they can be matched with the revenue in that period.

The accountant recorded $1,000 for rent in January $1,000 would be apportioned per month based on the total rent paid for 6 months.

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Dorian has started a cultural shift at his organisation in quality process. Which type of reaction will he most likely face in the early stages ?

Answers

The type of reaction will he most likely face in the early stages is rigid and reactive.

What is Organization?

Organization refers to the group of people working together in order to achieve the organizational goals. The goal of every organization is to maximize the profits for which it takes various activities.

In the above scenario, Dorian has started a cultural organization in a quality process. The changes made in any of the organization are rigid at first place.

The employees of the Dorian organization will react to the changes made regarding culture of the organization. Later on everyone will be adaptive to the changes.

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Account Balances
Assets = $37,526
Liabilities = $12,845
Equity = $32,500
You write a check for $759 to make a payment
on a loan. What are the new account balances?

Answers

If a person write a check for $759 to make a payment on a loan, then the account balance would be changed as in the balance sheet of the person.

What is account balance?

An Account balance is limited as the amount of monetary system that is hold in a specific account in the bank account or in any another account.

From the given case, if a person make a payment of loan, then the account balance would be:

Assets = $36,767 ($37,526 – $759)

Liabilities = $12,086 ($12,845  -$759)

Equity = $32,500

Therefore, the balance of Equity remains unaffected by the payment of loan.

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An agricultural manager requires work
different from that of a normal farmer in
which of the following ways?
A. being able to run farm equipment
B. being able to harvest crops
C. being able to obtain legal information on grant
programs
D. being able to raise livestock.

Answers

Answer:

C-Being able to obtain legal informational on grant programs

Explanation:

A steam generation system at a biomassfueled power plant uses an electrostatic precipitator (ESP) to clean its gaseous effluents. The power plant has consistently made use of the same type of ESP over the past several years. The installed cost of a new ESP has been relatively constant at $80,000. Records of operation and maintenance expenses indicate the following average expenses per year as a function of the age of the ESP. The MVs of the ESP are also reasonably well known as a function of age. Determine the best time to replace the ESP if the MARR
is 15% per year

Answers

A steam generation system at a biomass-fueled power plant uses an electrostatic precipitator (ESP) to clean its gaseous effluents. the best time to replace the ESP is mathematically given as

EUAC3= 46377.48

What is the best time to replace the ESP if the MARR is 15% per year?

Generally, the equation for the EUAC for the yrs of operation  is mathematically given as

For Year 1

EUAC1 = 85000 * (A/P,9%,1) + 25000 - 63000 * (A/F,9%,1)

EUAC1 = 54650

Solving till year 5

EUAC2= 46525.60

EUAC3= 46377.48

EUAC4= 48730.91

EUAC5= 50730.79

In conclusion,  the best time to replace the ESP if the MARR is 15% per year will be at the EUAC3= 46377.48  since EUAC is the lowest at that year.

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2. You now have Birr 2,000,000 in the bank earning interest of .5 percent per month. You need Birr 3,000,000 to make a down payment on a house. You can save an additional Birr 10,000 per month. How long will it take me to accumulate the Birr 3,000,000?

Answers

The number of months that it would take me to accumulate the Birr 3,000,000 is 50 months.

How many months would it take to accumulate 3,000,000?

The equation that represents the total amount saved :

Total amount =amount invested +  total interest earned + total amount earned

Total interest earned = amount invested x time x interest rate

2,000,000 x 0.005 x m = 10,000m

Total amount earned = savings per month x total number of months

10,000m

3,000,000 = 2,000,000 +  10,000m + 10,000m

3,000,000 - 2,000,000 = 20,000m

1,000,000 = 20,000m

m = 50 months

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how to solve the time value of money problems​

Answers

Answer:

The Time Value of Money formula is FV = PV x [ 1 + (i / n) ] (n x t)] where V is the Future value of money, PV is the Present value of money, i is the interest rate, n is the number of impounding periods per year, and t is the number of years.


What do researchers mean by "secondary data"?

A. Information from research already conducted for another
purpose

B. Data collected after any research to gather primary data

C. Data collected specifically for the researcher's own study

D. Data considered less important than primary data-

Answers

Answer:

A.

Explanation:

Your answer should be A.


I hope it helps! Have a great day!

bren~

Answer:

A. Information from research already conducted for another purpose.

Explanation:


I hope it helps! Have a great day!

Pan~

Deciding the best ways for customers to locate, get, and use the products and services of a business is called _____.

A. financing

B. marketing-information management

C. product/service management

D. distribution

Answers

Answer:

D. distribution

......

6) For which of the following should you save?
A) Purchases
C) Emergency fund
B) Wealth building
D) All of the above

Answers

For my retirement and my family future

Answer:

D). All of the above

A consumer protection agency that protects students who take out student
loans is the
O A. Consumer Financial Protection Bureau
OB. Food and Drug Administration
OC. Better Business Bureau
OD. Federal Trade Commission

Answers

It’s a consumer financial protection bureau

Here are simplified financial statements for Watervan Corporation:

1.) Calculate Watervan’s economic value added (EVA).
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.

2.) What is the company’s return on capital? (Use start-of-year rather than average capital.)
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

3.) What is its return on equity? (Use start-of-year rather than average equity.)
Note: Enter your answer as a percent rounded to 2 decimal places.

Answers

Based on the financial statements given for Watervan Corporation, the Economic Value Added is $54.501 million.

What is the Economic Value Added?

This can be found by the formula:

= (EBIT x (1 - Tax rate)) - (Cost of capital x Capital)

Tax rate is:

= 20 / 97 x 100

= 20.6%

Capital invested:

= Equity + Long term debt

= 256 + 121

= $377 million

Economic value added is:

= (109 x (1 - 20.6%)) - (8.5% x 377)

= $54.501 million

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