Jill's goal is to save enough for retirement so to able to withdraw $20,000 she turns 60 years old until
Jill's goal is to save enough for retirement so to able to withdraw $20,000 she turns 60 years old until she turns 80 years old. She is 30 years old now and currently have a savings of $25,000 She projects that she would be able to deposit $3,000 at the end of each year for the next 25 years. She sets up an investment account with Retire Prosper Investment Co. where she is promised her deposits will earn a compound interest of 6% per year. The amount in her account will then be transferred to a special term deposit account where they will earn a compound interest of 3% for the remaining of the years before her first withdrawal date. (the remaining balance will continue to earn the same rate of this account).
1.What would be balance in the account when she turns 60 ?
2.By how much she will be over or below her desired goal of yearly withdrawal?