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Time Value of Money In-class Examples

# Time Value of Money In-class Examples - Study Homework for...

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Study Homework for Ch. 14 and 16 Time Value of Money In-class Examples 1. You have just graduated and begun your career in physician practice management. You are offered a retirement plan through your company and you are trying to decide how much money to put into the plan each year. Beginning at age 65, you would like to be able to withdraw \$50,000 per year from your retirement savings for 10 years. To meet this goal, how much money will you need to put into your retirement plan per year assuming that you can earn 10% on your investment? Assume that you will put equal amounts into the plan each year and the amount will not change over time. Your contributions to the plan will cease once you begin making withdrawals. Assume that you are currently 22 years old and your first payment into the plan will come at the end of the year. 43 yrs \$307,230 = 50,000 * [(1-1/ (1.1) 10 ]/ .10 307,230 = PMT * [(1.1) 43 - 1]/.1 = PMT * 592.40 PMT = \$518.62 2. BetterCare Insurance Company is considering the development of a case management program for its insured diabetics.

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Time Value of Money In-class Examples - Study Homework for...

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