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Case 3 Noels House (5 marks) Noel, aged 46, owns a house which is now worth $825,000. He plans to live in his house until

Case 3 Noels House (5 marks)

Noel, aged 46, owns a house which is now worth $825,000. He plans to live in his house until he is 70, then sell it, move into a retirement apartment, and live off the proceeds until he dies which he expects to do at the age of 95. He expects his house will increase at a real rate of return of 3% p.a. If his house increases in value by 2% in real return p.a., how much less per year will he have to live on, assuming he sells the house as planned and invests the proceeds at 5% real return? Show all steps, and values input in the financial calculator.

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