On January 1, 1980, your favorite uncle John turned 43 and started saving for his retirement....
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On January 1, 1980, your favorite uncle John turned 43 and started saving for his retirement. He invested $23,159.83 each year on January 1 until he turned 62 on 1/1/1999 (20 total deposits). Over the 20 years, he managed to earn an effective annual rate of return of 8.50%, and he assumed he could continue to earn that rate of return until he turned 90. Looking at his account balance, he calculated that he could immediately withdraw $74,050.56 to cover living expenses for 1999. And, going forward, he could withdraw that same amount on January 1 of each year, but adjusted for a 3% inflation. That is, in 2000, he could withdraw $74,050.56 x 1.03 $76,272.08; in 2001, $74,050.56 x 1.03² $78,560.24; etc. He planned on a total of 28 withdrawals, with the last one of $164.487.70 on 1/1/2026 when he turned 89. At that point, the account balance would be zero. = On 1/1/2023, right after making his withdrawal for 2023, your uncle decided to become a Tibetan monk. He left you the balance of his investment account. How much was in the account? Assume he earned the 8.50% each year. Enter your answer in dollars, truncated to the nearest dollar, with no punctuation. For example, if your answer is $255,895.76, enter "255895". Note that Canvas may include commas. On January 1, 1980, your favorite uncle John turned 43 and started saving for his retirement. He invested $23,159.83 each year on January 1 until he turned 62 on 1/1/1999 (20 total deposits). Over the 20 years, he managed to earn an effective annual rate of return of 8.50%, and he assumed he could continue to earn that rate of return until he turned 90. Looking at his account balance, he calculated that he could immediately withdraw $74,050.56 to cover living expenses for 1999. And, going forward, he could withdraw that same amount on January 1 of each year, but adjusted for a 3% inflation. That is, in 2000, he could withdraw $74,050.56 x 1.03 $76,272.08; in 2001, $74,050.56 x 1.03² $78,560.24; etc. He planned on a total of 28 withdrawals, with the last one of $164.487.70 on 1/1/2026 when he turned 89. At that point, the account balance would be zero. = On 1/1/2023, right after making his withdrawal for 2023, your uncle decided to become a Tibetan monk. He left you the balance of his investment account. How much was in the account? Assume he earned the 8.50% each year. Enter your answer in dollars, truncated to the nearest dollar, with no punctuation. For example, if your answer is $255,895.76, enter "255895". Note that Canvas may include commas.
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ANSWER To calculate the account balance on 112023 we need to determine the futur... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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