Your RRSP will pay an average of 7% per year After you retire when you are 68 years old you plan to withdraw $31,000/year for 32 years. How much money would you need to have saved in your bank account by the time you turn 67 so you can receive payments of $31,000/year?

Your RRSP will pay an average of 7% per year After you retire when you are 68 years old you plan to withdraw $31,000/year for 32 years. How much money would you need to have saved in your bank account by the time you turn 67 so you can receive payments of $31,000/year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

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Question

You plan to retire when you are 67 years old.
You plan to start saving money for retirement,
via RRSP when you are 25 years old.
Your RRSP will pay an average of 7% per year
After you retire when you are 68 years old you
plan to withdraw $31,000/year for 32 years.
How much money would you need to have
saved in your bank account by the time you turn
67 so you can receive payments of
$31,000/year?
Choose the range which is most accurate.
O a. $403,000 - $406,000
O b.
$406,000 - $409,000
O c.
$412,000 - $415,000
d. NONE of the RANGES are CORRECT
e.
$400,000-$403,000

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