Retirement planning Your sister turned 35 today, and she is planning to save $5,000 per year for retirement, with the first deposit made one year from today and the last deposit made on her 65th birthday. She currently has no retirement savings. She will invest in a mutual fund, which she expects to provide a return of 10% per year throughout her lifetime. She plans to retire 30 years from today when she turns 65. She will make a total of 20 annual withdrawals—with her first withdrawal made on her 66th birthday, and the last withdrawal made when she is 85. After the last withdrawal there will be $500,000 left in the account. Under these assumptions, how much can she spend in each year after she retires? 10. a. $71,880.34 b. $79,888.38 c. $83,882.80 d. $87,877.22 e. $98,125.22

Retirement planning Your sister turned 35 today, and she is planning to save $5,000 per year for retirement, with the first deposit made one year from today and the last deposit made on her 65th birthday. She currently has no retirement savings. She will invest in a mutual fund, which she expects to provide a return of 10% per year throughout her lifetime. She plans to retire 30 years from today when she turns 65. She will make a total of 20 annual withdrawals—with her first withdrawal made on her 66th birthday, and the last withdrawal made when she is 85. After the last withdrawal there will be $500,000 left in the account. Under these assumptions, how much can she spend in each year after she retires? 10. a. $71,880.34 b. $79,888.38 c. $83,882.80 d. $87,877.22 e. $98,125.22

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 43P

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