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Mrs. Boko just celebrated 30th birthday. She plans to retire at the age of 65. She would like to be able to withdraw $150,000
Mrs. Boko just celebrated 30th birthday. She plans to retire at the age of 65. She would like to be able to withdraw $150,000 per year from her retirement account for 30 years. That means her withdraw of first $150,000 will be made on her 65th birthday. She is also expecting an inheritance of $75,000 to be transferred to her on her 35th birthday. b. a. How much does she need to have in her retirement account by retirement date if the interest rate is 6% per year during the post-retirement years? [6 marks] Suppose she already has $12,000 in her retirement investment account that earns 9% per year. What will be the value of this amount by her retirement date? [4 marks] c. Given her goal, her expected inheritance, and the investment she already has in 1b, how much does she need to invest per year from now till retirement (at 9% annual rate of return) to reach her retirement goal? [10 marks]
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