1. You have some savings in a bank which is earning a 3.5% rate of interest....

 

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1. You have some savings in a bank which is earning a 3.5% rate of interest. You want to begin a retirement fund for yourself by investing in the stock market. You believe you will need $350,000 to retire at your target date, twenty-seven years from now. You know that a long-term investment in a stock fund has typically paid a 7% per year return and you can invest in this fund. How much must you withdraw from your savings account and invest today in the stock fund to realize the $ 350,000 twenty-seven years from now? 1. You have some savings in a bank which is earning a 3.5% rate of interest. You want to begin a retirement fund for yourself by investing in the stock market. You believe you will need $350,000 to retire at your target date, twenty-seven years from now. You know that a long-term investment in a stock fund has typically paid a 7% per year return and you can invest in this fund. How much must you withdraw from your savings account and invest today in the stock fund to realize the $ 350,000 twenty-seven years from now?

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