(Future value of an annuity and annuity payments) You are trying to plan for retirement in 12 years, and currently you
Posted: Mon Apr 25, 2022 7:42 am
(Future value of an annuity and annuity payments) You are
trying to plan for retirement in 12 years, and currently you have
$210,000 in a savings account and $350,000 in stocks. In
addition, you plan to deposit $9,000 per year into your savings
account at the end of each of the next 6 years, and then $12,000
per year at the end of each year for the final 6 years until you
retire. a. Assuming your savings account returns 8 percent
compounded annually, and your investment in stocks will return 12
percent compounded annually, how much will you have at the end of
12 years? (Ignore taxes.) b. If you expect to live for 15 years
after you retire, and at retirement you deposit all of your
savings into a bank account paying 11 percent, how much can you
withdraw each year after you retire (making 15 equal withdrawals
beginning one year after you retire) so that you end up with a
zero-balance at death?
trying to plan for retirement in 12 years, and currently you have
$210,000 in a savings account and $350,000 in stocks. In
addition, you plan to deposit $9,000 per year into your savings
account at the end of each of the next 6 years, and then $12,000
per year at the end of each year for the final 6 years until you
retire. a. Assuming your savings account returns 8 percent
compounded annually, and your investment in stocks will return 12
percent compounded annually, how much will you have at the end of
12 years? (Ignore taxes.) b. If you expect to live for 15 years
after you retire, and at retirement you deposit all of your
savings into a bank account paying 11 percent, how much can you
withdraw each year after you retire (making 15 equal withdrawals
beginning one year after you retire) so that you end up with a
zero-balance at death?