Question
You are planning for your retirement in 32 years. At that time you want to have enough saved to be able to afford to spend
You are planning for your retirement in 32 years. At that time you want to have enough saved to be able to afford to spend $60,000 per year (starting at time 33) for 24 years (if you live longer than 24 years your kids will have to support you).
a. How much will you need to have saved by time 32 if the expected interest rate from time 32 to 56 is 14 percent per year?
correct answer:410,108.2410
b. Suppose that at time 32 you will receive a retirement bonus of $40,000 from your company. If the annual percentage rate (APR) is expected to be 6 percent, compounded monthly, from now until time 32, how much would you need to save at the end of each month in order to be able to make the desired withdrawals at retirement (i.e., in order to have $410,108.24, including the bonus, saved at time 32)?
plz answer b
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