Carl Wilfred wishes to have $400,000 in a retirement fund 20 years from now. He can create the retirement fund by making asingle lump-sum deposit today.

a. If he can earn 6% on his investments, how much must Carl deposit today to create the retirement fund? If he can earn only 4% on his investments? Compare and discuss the results of your calculations.

b. If upon retirement In 20 years Carl plans to Invest the $400,000 in a fund that earns 5%, what is the maximum annual withdrawal ho can make over the following 15 years?

c. How much would Carl need to have on deposit at retirement to annually withdraw $35,000 over the 15 years if the retirement fund earns 8%?

d. To achieve his annual Withdrawal goal of $35,000 calculated in part c, how much more than the amount calculated in part a must Carl deposit today in an investment earning 5% annual interest?

Answer rating: 100% (QA)

a Calculate the amount to be deposit today present value Carl Wilfred wishes to ha... View the full answer