You are planning for retirement over the next 20 years and intend to invest $400 a month in an equity index fund and $200 a month in a bond index fund. The expected annual return on the equity and bond index fund is 9% and 3% respectively. When you retire, you will combine your money from both the equity and bond index funds into a bank account that pays an interest of 1.2% per year.

(a) Solve the amount you will have on retirement.

(b) Solve the amount you can withdraw each month assuming a 15-year retirement period.

Answer rating: 100% (QA)

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