Joe Doe is currently 65 years of age. He is currently drawing $20,000 a yearout of his IRA. He expects to live to 100 and wants to know what he needsnow to insure himself that he will be able to draw the $20,000 at the beginningof each year for the next 35 years. He believes the account will earn6 percent compounded annually for the next 35 years. How much moneydoes he need in his account today?
Joe Doe is currently 65 years of age. He is currently drawing $20,000 a yearout of his IRA. He expects to live to 100 and wants to know what he needsnow to insure himself that he will be able to draw the $20,000 at the beginningof each year for the next 35 years. He believes the account will earn6 percent compounded annually for the next 35 years. How much moneydoes he need in his account today?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 39P
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Joe Doe is currently 65 years of age. He is currently drawing $20,000 a year
out of his IRA. He expects to live to 100 and wants to know what he needs
now to insure himself that he will be able to draw the $20,000 at the beginning
of each year for the next 35 years. He believes the account will earn
6 percent compounded annually for the next 35 years. How much money
does he need in his account today?
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