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Question # 2 : You are 6 5 - years - of - age and just retired with financial capital ( i . e .

Question #2: You are 65-years-of-age and just retired with financial capital (i.e. nest egg) of $1,000,000. This portfolio of financial capital is invested in an investment account that will earn a fixed 4% nominal per year (compounded monthly) forever. You are planning to withdraw $100,000 per year from this account, in monthly increments and adjusted each month by an annualized inflation rate of 2%. Part A: Please compute the exact age (with one decimal point) at which you will run out of money. Convert that into months and years. Part B: What is the minimum investment interest rate that you have to earn each year, so that your money will last forever and you never run-out of money? Part C: Derive a general (or even an approximate) analytic expression for the AGE at which you will run out of money if you start with capital denoted by W and you withdraw an annual amount c(monthly), the account earns an annual interest rate of R nominally and the annual inflation rate is denoted by .

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