13. You wish to retire in 35 years'time when you get to 65 years old. You will require a monthly pension of R65 000 per month at the time. The monthly pension will be paid over a period of 25 years after retirement. You will contribute to a retirement fund which is expected to eam a return of 1.25% per month (15% per year) before and after retirement, interest compounded monthly. Assume you need to have accumulated an amount of R5 000 000 in 35 years' time in order to generate the required monthly pension. What should your monthly instalments be, if you assume you make equal instalments over the next 35 years? A) R340.66 B) R114 755.57 C) R140 343.18 D) None of the above
13. You wish to retire in 35 years'time when you get to 65 years old. You will require a monthly pension of R65 000 per month at the time. The monthly pension will be paid over a period of 25 years after retirement. You will contribute to a retirement fund which is expected to eam a return of 1.25% per month (15% per year) before and after retirement, interest compounded monthly. Assume you need to have accumulated an amount of R5 000 000 in 35 years' time in order to generate the required monthly pension. What should your monthly instalments be, if you assume you make equal instalments over the next 35 years? A) R340.66 B) R114 755.57 C) R140 343.18 D) None of the above
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 32P
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Transcribed Image Text:13. You wish to retire in 35 years' time when you get to 65 years old. You will require
a monthly pension of R65 000 per month at the time. The monthly pension will
be paid over a period of 25 years after retirement. You will contribute to a
retirement fund which is expected to eam a return of 1.25% per month (15%
per year) before and after retirement, interest compounded monthly. Assume
you need to have accumulated an amount of R5 000 000 in 35 years' time in
order to generate the required monthly pension. What should your monthly
instalments be, if you assume you make equal instalments over the next 35
years?
A) R340.66
B) R114 755.57
C) R140 343.18
D) None of the above
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