You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time which will allow you an annual withdrawal of $100,000 every year for 30 years. The average interest rate between now and the 20th year is likely to be 4% p.a. From then onwards, for the next 30 years, it is likely to be 6% p.a.How much should you save in an interest-bearing account at the end of each month to be able to have enough money at the time of retirement which will allow you your desired withdrawal of $100,000 every year for 30 years after retirement? Assume that the interest in the interest-bearing account is compounded monthly

You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time which will allow you an annual withdrawal of $100,000 every year for 30 years. The average interest rate between now and the 20th year is likely to be 4% p.a. From then onwards, for the next 30 years, it is likely to be 6% p.a.How much should you save in an interest-bearing account at the end of each month to be able to have enough money at the time of retirement which will allow you your desired withdrawal of $100,000 every year for 30 years after retirement? Assume that the interest in the interest-bearing account is compounded monthly

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 23P

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