Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

( Future value of an annuity and annuity payments ) You are trying to plan for retirement in 1 0 years, and currently you have

(Future value of an annuity and annuity payments) You are trying to plan for retirement in 10 years, and currently you have $180,000 in a savings account and $300,000 in stocks. In addition,
a. Assuming your savings account returns 9 percent compounded annually, and your investment in stocks will return 13 percent compounded annually, how much will you have at the end of 10 years? (Ignore taxes.)
b. If you expect to live for 19 years after you retire, and at retirement you deposit all of your savings into a bank account paying 12 percent, how much can you withdraw each year after you retire (making 19 equal withdrawals beginning one year after you retire) so that you end up with a zero-balance at death?
a. Assume your savings account returns 9 percent compounded annually, and your investment in stocks will return 13 percent compounded annually.
How much will you have at the end of 10 years in your savings account? (Ignore taxes.)
(Round to the nearest cent.)
How much will you have at the end of 10 years for your investment in stocks? (Ignore taxes.)
$ (Round to the nearest cent.)
Therefore, how much will you have at the end of 10 years?
(Round to the nearest cent.)
b. If you expect to live for 19 years after you retire, and at retirement you deposit all of your savings into a bank account paying 12 percent, how much can you withdraw each year after retirement (19 equal withdrawals beginning one year after you retire) to end up with a zero balance upon your death?
(Round to the nearest cent.)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Property Finance

Authors: David Isaac

2nd Edition

0333987144, 978-0333987148

More Books

Students also viewed these Finance questions

Question

5. Is your hero motivated, at least in part, by guilt?

Answered: 1 week ago

Question

e. What do you know about your ethnic background?

Answered: 1 week ago

Question

b. Why were these values considered important?

Answered: 1 week ago