Sam wants to save money to meet two objectives. First, he would like to buy a fishing boat 5 years from today at an estimated cost of $15,000. Second, he would like to retire 20 years from now and have a retirement income of $50,000 per year for at least 20 years. Sam can afford to save only $10,000 per year for the first 10 years. He expects to earn 8% per year on average from his savings over the next 40 years. What must his minimum yearly savings be for the second 10 years to meet his objectives
Sam wants to save money to meet two objectives. First, he would like to buy a fishing boat 5 years from today at an estimated cost of $15,000. Second, he would like to retire 20 years from now and have a retirement income of $50,000 per year for at least 20 years. Sam can afford to save only $10,000 per year for the first 10 years. He expects to earn 8% per year on average from his savings over the next 40 years. What must his minimum yearly savings be for the second 10 years to meet his objectives
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 35P
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Sam wants to save money to meet two objectives. First, he would like to buy a fishing boat 5 years from today at an estimated cost of $15,000.
Second, he would like to retire 20 years from now and have a retirement
income of $50,000 per year for at least 20 years. Sam can afford to save only $10,000 per year for the first 10 years.
He expects to earn 8% per year on average from his savings over the next 40 years.
What must his minimum yearly savings be for the second 10 years to meet his objectives?
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