Question
You want to save for retirement by making equal annual contributions over the next 40 years and use your retirement savings to make equal withdrawals
You want to save for retirement by making equal annual contributions over the next 40 years and use your retirement savings to make equal withdrawals for 30 years after retirement. Assume you make your first withdrawal exactly 1 year after your last deposit. At t=15 you received a one-time bonus of $30,000 that you add to your retirement account in addition to your regular contributions. Assume you still plan to make 30 equal withdrawals. By how much your annual retirement withdrawals have been increased because of this extra contribution? Assume the annual interest rate (with annual compounding) is 8%.
| $2,664.82 |
| $18,249.97 |
| $8,453.27 |
| Cannot be determined from the available information |
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