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You are planning to save for retirement over the next 25 years. To do this, you will invest $850 per month in a stock account and $450 per month in a bond account. The return of the stock account is expected to be 10.5 percent, and the bond account will pay 6.5 percent. When you retire, you will combine your money into an account with a return of 7.5 percent. How much can you withdraw each month from your account assuming a 20- year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

You are planning to save for retirement over the next 25 years. To do this, you will invest $850 per month in a stock account and $450 per month in a bond account. The return of the stock account is expected to be 10.5 percent, and the bond account will pay 6.5 percent. When you retire, you will combine your money into an account with a return of 7.5 percent. How much can you withdraw each month from your account assuming a 20- year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 44P
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You are planning to save for retirement over the next 25 years. To do this, you will invest $850 per month in a stock account and $450 per month in a bond account. The return of the stock account is expected to be 10.5 percent, and the bond account will pay 6.5 percent. When you retire, you will combine your money into an account with a return of 7.5 percent. How much can you withdraw each month from your account assuming a 20- year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Withdrawal per month
Transcribed Image Text:You are planning to save for retirement over the next 25 years. To do this, you will invest $850 per month in a stock account and $450 per month in a bond account. The return of the stock account is expected to be 10.5 percent, and the bond account will pay 6.5 percent. When you retire, you will combine your money into an account with a return of 7.5 percent. How much can you withdraw each month from your account assuming a 20- year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Withdrawal per month
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