Question
Questions: a) Bill has $385,000 savings for retirement and his current weekly expenses total $1,200. How much can he withdraw on a quarterly basis if
Questions:
a) Bill has $385,000 savings for retirement and his current weekly expenses total $1,200. How much can he withdraw on a quarterly basis if his savings return 4% yearly and he expects to live 20 more years? Calculate payout annuity
b) Is the amount determined in question 1 sufficient to meet Bill's current weekly expenditure (keep in mind that he will receive a quarterly payment of $5,000)? If not, how long will his retirement last if his current expenses remain the same? What if his expenses were reduced to $4,000 per month?
c) If the inflation rate averages 3.8% during Bill's retirement, how old will he be when prices have doubled from current levels? How much will a can of soft drink cost when Bill dies, if he lives the full 20 years and the soft drink costs $1.10 today?
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