Kevin dreams of retiring to Idaho. He figures that he will spend 25 years in retirement and
Question:
Kevin dreams of retiring to Idaho. He figures that he will spend 25 years in retirement and will need monthly withdrawal of $3200. His retirement account is expected to earn 6% APR, compounded monthly.
a) How much money would he need to have in his retirement account when he retire?
b) Kevin just started a saving plan by putting the same amount into his retirement account every month starting next month. How much monthly deposit does he need to make to achieve his retirement plan if he want to retire in 40 years?
c) If Kevin dies suddenly from some freak potato-based accident 10 years after he retires,
what amount of money will be in his retirement account for his heirs.
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty