Question: Currently, Ally Gator has saved $ 1 5 , 0 0 0 in her retirement account. Ally plans on saving $ 6 5 0 0

Currently, Ally Gator has saved $15,000 in her retirement account. Ally plans on saving $6500 annually for next 35 years and she assumes that she will earn 8% annually up until she retires. Ally is afraid that she will run out of money during her retirement, so she plans on applying the principles of a perpetual annuity to her retirement savings. If Ally plans to earn 4% annually during her retirement years, how much will she be able to withdraw annually forever?
$29,688
$39,365
$53,674
$60,813
 Currently, Ally Gator has saved $15,000 in her retirement account. Ally

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!