Real Cash Flows You are planning to save for retirement over the next 30 years. To save for retirement, you will invest £900 a month in an equity account in real pounds and £450 a month in a bond account in real pounds. The effective annual return of the equity account is expected to be 11 per cent, and the bond account will earn 7 per cent.

When you retire, you will combine your money into an account with a 9 per cent effective return. The inflation rate over this period is expected to be 4 per cent. How much can you withdraw each month from your account in real terms, assuming a 25-year withdrawal period? What is the nominal pound amount of your last withdrawal?