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Mr. Smith wishes to retire in ten years time. He requires a pension of $8 000 per month for twenty years, commencing the month immediately
Mr. Smith wishes to retire in ten years’ time. He requires a pension of $8 000 per month for twenty years, commencing the month immediately after the month he retires. A nominal (quoted) interest rate of 12% per annum would be appropriate for your calculations. Interest is compounded monthly. Calculate the amount that should be invested today to enable Mr Smith to receive his required pension. Please show working.
F12 EE300 Trial 1 0 3 2 02 4 Trial H/T run length Trial H/T 51 0 76 0 27 1 52 0 12 53 0 78 29 0 54 0 79 04 30 012 55 05 80 1 31 11 56 11 81 1 32 0 57 0 82 1 33 0 58 0 83 1 34 03 59 0 84 1 35 1 60 014 85 16 36 1 61 1 86 0|1 37 13 62 1 87 1 MO 38 0 63 13 88 1 39 0 64 0|1 89 13 40 0 65 1 90 0 41 04 66 12 91 02 42 1 67 0 92 11 43 12 68 02 93 0 44 0 69 1 94 0 45 0 70 12 95 0 46 0 71 0 96 47 0 72 0 97 11 48 0 73 03 98 0|1 06 74 1 75 12 5 6 7 8 9 H=1 H/T run length Trial 26 13 15 11 0|1 1 1 10 0 18 1 1 11 02 12 1 15 14 01 100 Coin tosses =INT(2*RAND()) 25 1/2 16 0 11 17 02 19 0 11 20 0 21 0 22 0 23 015 24 1 12 12 Subtotal Heads 12 9 10 12 Grand Total 43 Heads 28 49 H/T 50 Run run length 0|1 11 9 Subtotal Heads 1 16 2 13 Simulation 35 44 53 10 Subtotal Heads 77 0 99 Heads run length in row 0 0 014 11 100 01 12 Subtotal Heads 01234 1 2 0 ww1ONNIN WANNNNNANC 2 4 2 2 2 2 2 4 3 2 2 2 0 0 3 3 46032 10
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