Funding a retirement goal. Austin Miller wishes to have $800,000 in a retirement fund 20 years from
Question:
Funding a retirement goal. Austin Miller wishes to have $800,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump-sum deposit today.
a. If upon retirement in 20 years, Austin plans to invest $800,000 in a fund that earns 4 percent, what is the maximum annual withdrawal he can make over the following 15 years?
b. How much would Austin need to have on deposit at retirement in order to withdraw $35,000 annually over the 15 years if the retirement fund earns 4 percent?
c. To achieve his annual withdrawal goal of $35,000 calculated in part
b, how much more than the amount calculated in part a must Austin deposit today in an investment earning 4 percent annual interest?101
Step by Step Answer:
PFIN
ISBN: 9780357033616,9780357033692
7th Edition
Authors: Randall Billingsley , Lawrence J. Gitman , Michael D. Joehnk