Question
(FUTURE VALUE OF AN ANNUITY AND ANNUITY PAYMENTS) You are trying to plan for retirement in 10 years, and currently you have $90,000 in a
(FUTURE VALUE OF AN ANNUITY AND ANNUITY PAYMENTS) You are trying to plan for retirement in 10 years, and currently you have $90,000 in a savings account and $150,000 in stocks. In addition, you plan to deposit $10,000 per year into a savings account at the end of each of the next 5 years, and then $12,000 per year at the end of each year for the final 5 years until you retire.
a. Assume your savings account returns 6% compounded annually, and your investment in stocks will return 10% compounded annually. How much will you have in each at the end of 10 years(ignore taxes)
b. if you expect to live for 17 years after you retire, and at retirement you deposit all of your savings into a bank account paying 9%, how much can you withdraw each year after you retire(making 17 equal withdrawlas beginning one year after you retire) so that you end up with a zero-balance at death
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