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Can someone help me with this funding your retorement problem? its for my finance class im just lost Funding your retirement. Emily Jacob is 45
Can someone help me with this funding your retorement problem?
its for my finance class im just lost
Funding your retirement. Emily Jacob is 45 years old and has saved nothing for retiroment. Fortunately, she just inherited $79,000. Emily plans to put a large portion of that monoy into an investment account earring a (n) 14% retum. She will let the money accumulate for 20 years, when she wil be ready to retice. She would like to deposit enough money todity so she could begin making wthdrawils of $48,000 por year starting at age 66 (21 years from now) and continuing for 24 addtional years, When she will make her last withdrawnl at age 90 . Whatever remains from her inhentance, Emily will spend on a shopping spree Einily wil continue to eam 14% on money in her irvestment account during her retrement years, and she warts the balance of her retirement accound to be $0 atter her withdrawal on her ninebeth brthiday a. How much money must Emily set aside now to achiove that goa? it may be heiptul to corstruct a timeline to visualize the details of this problem. b. Emily roalizes that once she retires she will want to have less risky imestmients that wil earn a sightly lower rate of return, 6% rather than 14%. If Emily can earn 14% on her investrients from now until age 65, but ste earrs just 8% on her investments from age 65 to 90 , how much monoy does she need to set aside todiay to achieve her goal? c. Suppose Emily puts all of the $79,000 that she inherited into the account eaming 14%. As in part b, she will earn only a(n) 8% retum on her investements after ago 65 . If Emily withdraws $48,000 as planned on each binhdry trom age 65 to age 90 , how much wil be left in her account for hor heirs after her last withdrawa? a. The amount Emily must set aside now is $ (Round to the nearest cent.) b. The amount Emily needs to set aside to achieve her goal is $ (Round to the nearest cent.) c. The amount that will be left in the account for her heirs is $ (Round to the nearest cent.) Step by Step Solution
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