You want to retire in 30 years. Currently, you have $100,000 invested in a bond account and $200,000 invested in a stock account. The bond account will earn a 7 percent EAR and the stock account will earn an 11 percent EAR. You also plan to deposit $750 per month for the next 15 years into the stock account and then $1,000 per month for the last 15 years into your bond account. All deposits are in real terms. When you retire you plan to move all of your money into an account that earns an 8.5 percent EAR. You plan to live for 25 years after you retire. Additionally, at the end of your retirement you want to leave $1,000,000 for your grandchildren in today's dollars. All rates are nominal. Over the next 55 years, you expect inflation to be 3.5 percent. How much can you withdraw each month in real terms? What is the amount of the check your grandchildren will receive? 30 S $ A $ Years until retirement Current investments Bond account Stock account Bond account return Stock account return Deposit into stock account Years for stock deposit Deposit into bond account Years for bond deposit Retirement return Years in retirement Amount for grandchildren Inflation 100,000 200,000 7% 11% 750 15 1,000 15 8.5% 25 1,000,000 3.50% S S