Question
Bilbo Baggins wants to save money to meet his retirement objectives. He would like to be able to retire 30 years from now with a
Bilbo Baggins wants to save money to meet his retirement objectives. He would like to be able to retire 30 years from now with a retirement income of $14,306 per month for 20 years, with the first payment received 30 years and 1 month from now. After he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $719,228 to his nephew Frodo. Before his retirement, he plans to deposit $2,000 per month in Account #1, which will earn 3.6%, and $x per month in Account #2, which will earn 5.4%. The post-retirement return is equal to 7.2%. How much will Bilbo have to save in Account #2 every month (i.e., $x) in order to achieve his retirement objectives? * Round your answer to two decimal places.
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