Question $8[5$ marks$]$

It is Dec. $31,2040,$ and you are planning to save for your retirement over the next $30$ years. You will invest $$900$ per month in an equity account indexed to the Russell $2000$ Index and $$950$ per month in a fixed$-$income account. Assume that the return on the equity account is $12\%$ per year, whereas the return on the fixed$-$income account is $6\%$ per year. Determine the value of your saving at your retirement on Dec. $31,2070.$

Answer $($show the steps$/$calculation toward your results$)$:

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Question $9[5$ marks$]$

To answer this question, use the information provided in Question $8.$

When you retire at the end of $2070,$ you will combine your money returned from the two accounts and put it in a new risk$-$free account. Suppose the risk$-$free rate at your retirement is estimated at $3\%$ per year. If you wish to withdraw an equal amount each month over a $25-$year period, from Jan. $31,2071,$ how much will the monthly withdrawal be$?($Lecture notes pp$\mathrm{.}14-15)$

$*$In case you are unsure about your result in Question $8,$ feel free to use $$3,600,000$ as the value of the sum of the money to be received at retirement on Dec. $31,2070.$

Answer $($show the steps$/$calculation toward your results$)$: