1. Mr COVID is 40 years old and is planning to accumulate 10 million pesos on the day of his retirement, at 60. From this retirement fund, he is going to draw a monthly pension, the first of which to be drawn one year after his retirement day, continuing until he is 90 years old . a. What should the monthly withdrawal be assuming interest at 12% pa compounded monthly. Show the cash flow diagram. b. What must his annual deposit be in order to finance his pension plan if the first deposit is made on his 42nd birthday, continuing it until his retirement day?

1. Mr COVID is 40 years old and is planning to accumulate 10 million pesos on the day of his retirement, at 60. From this retirement fund, he is going to draw a monthly pension, the first of which to be drawn one year after his retirement day, continuing until he is 90 years old . a. What should the monthly withdrawal be assuming interest at 12% pa compounded monthly. Show the cash flow diagram. b. What must his annual deposit be in order to finance his pension plan if the first deposit is made on his 42nd birthday, continuing it until his retirement day?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

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