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John Jetison

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John Jetison believes he would need $500,000 to retire today and keep his same lifestyle. If Jetison
estimates he will retire in 20 years, how much should he put away each month to have the equivalent of
$500,000 in 20 years if the interest he can earn is 5%? If the interest rate changes to 3%, what will
Jetison need to save each month? Picture cash flows on a timeline and present it when providing your
answer. Think about your own retirement; what would the timeline look like? In what ways could you
better prepare for retirement?
If using a financial calculator, you would enter in the following
n = 240 (since it is 20 years on a monthly basis = 20 x 12)
i/y = .00416 (since it is 5% annually, then the monthly amount would be
.05/12 = .00416)
FV = $500,000.
PV = 0
CPT PMT = ?
This amount will come out as a negative, meaning that will be the amount to
deposit on a monthly basis.
Try this online calculator and see what you come up with
(http://www.zenwealth.com/BusinessFinanceOnline/TVM/TVMCalcWindow.html).
I utilized the TVM calculator that Professor Betty Ross provided to get my answers to the week
3 discussion board question. I got a negative number being -$2072.99 per month at a 5 % rate
(5% Annual and .004166 % monthly). I got a negative number being - $2077.12 per month at 3
% rate (3% Annual and .0025 % monthly).
Unfortunately, I have never been able to save for retirement and do not even have anything built
in for social security due to the lack of work credits since I've never really had steady
employment or been without work for years due to medical. If I wanted to reach a goal of
$120,000 at a (4 % Annual interest rate and .0033 % monthly) the TVM calculator says my PMT
is -$498.03 per month and at a 6 % Annual interest rate and 0.005 % monthly) the TVM
calculator says my PMT is -$497.02 per month.

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John Jetison believes he would need $500,000 to retire today and keep his same lifestyle. If Jetison estimates he will retire in 20 years, how much should he put away each month to have the equivalent of $500,000 in 20 years if the interest he can earn is 5%? If the interest rate changes to 3%, what ...
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Anonymous
Excellent resource! Really helped me get the gist of things.

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