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 $13,217 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 $730,878 to his nephew Frodo. The post-retirement return is equal to 7.2%.
Before his retirement (from Y1 to Y30),
- 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%.
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 and input your answer as a POSITIVE number.
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