Question
Complete the following Complex Time Value of Money problem. Show your work. You are doing some long-range retirement planning. On the day you retire (28
Complete the following Complex Time Value of Money problem. Show your work. You are doing some long-range retirement planning. On the day you retire (28 years from now) you want to be able to withdraw $180,000. Then, you want to withdraw the following amounts at the end of each year after that (during your retirement period). Years 1-6 $140,000 Years 7-10 $160,000 Year 11 $250,000 Years 12-22 $145,000 At the end of the 22nd year in retirement, youd like to have $400,000 remaining in your retirement account available for withdraw (Note that this is equivalent to a $545,000 withdraw in year 22). During your retirement years, you anticipate earning a 4.7% rate of return. You currently have $90,000 that you are going to use to start your retirement savings today. In addition, you plan to save $350 at the end of every other week for the next 14 years. At that point (14 years from today) you will add another $125,000 to your retirement fund. Then, over the remaining 14 years, how much must you save at the end of every other week to reach your goal if you earn 9.3% as a rate of return during the first 14 years and 7.8% over the final 14 years in which you are saving for retirement? (Hint Your final answer should somewhere between $300 and $450 if you did this correctly).
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