Question
You have just had your 30 th birthday. You have two children. One will go to college 10 years from now and require four beginning-of-year
You have just had your 30th birthday. You have two children. One will go to college 10 years from now and require four beginning-of-year payments for college expenses of $10,000, $11,000, $12,000, and $13,000. The second child will go to college in 15 years from now and require four beginning-of-year payments for college expenses of $15,000, $16,000, $17,000, and $18,000. In addition, you plan to retire 30 years from now. You want to have $12,000 available for each month of your expected 25 years of retirement. These funds will need to be available at the beginning of each month. The first withdrawal will occur on your 60th birthday. What equal, end-of month amount must you save over each of the next 30 years to meet these goals assuming all savings earn an annual, after-tax rate of return of 5 percent over the entire horizon?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started