Question
Austin Miller wishes to have $500,000 in a retirement fund 30 years from now. He can create the retirement fund by making a single lump-sum
Austin Miller wishes to have $500,000 in a retirement fund 30 years from now. He can create the retirement fund by making a single lump-sum deposit today. Use next table to solve the following problems.
If upon retirement in 30 years, Austin plans to invest $500,000 in a fund that earns 10%, what is the maximum annual withdrawal he can make over the following 20 years? Round the answer to the nearest cent. Round PVA-factor to three decimal places.
Calculate your answer based on the PVA-factor. $ _________
Calculate your answer based on the financial calculator. $________
How much would Austin need to have on deposit at retirement in order to withdraw $45,000 annually over the 20 years if the retirement fund earns 10%? Round the answer to the nearest cent. Round PVA-factor to three decimal places.
Calculate your answer based on the PVA-factor. $________
Calculate your answer based on the financial calculator. $_______
To achieve his annual withdrawal goal of $45,000 calculated in part b, how much more than the amount calculated in part a must Austin deposit today in an investment earning 10% annual interest? Round PVA-factor to three decimal places. Round your answer to the nearest cent. If an amount is zero, enter "0". _______
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