You put $20,000 on deposit on your thirtieth birthday at 5 percent compounded annually. On your fortieth
Question:
You put $20,000 on deposit on your thirtieth birthday at 5 percent compounded annually. On your fortieth birthday, the account begins earning 6 percent. Then on your fiftieth birthday, it begins earning 7 percent. You plan to withdraw equal annual amounts on your sixty-first, sixty-second, . . . , seventieth birthdays.
a. How much will be your annual withdrawal?
b. On your sixty-fifth birthday, you decide to withdraw the entire amount remaining. How much do you withdraw?
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Step by Step Answer:
To solve this problem well follow these steps 1 Calculate the future value FV of the initial deposit at the beginning of each interest rate period 5 6 and 7 2 Use the FV of the account at age 60 to ca...View the full answer
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Related Book For 
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt
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