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You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $220,000 per year for the next 30 years (based on family history, you think you will live to age 70). You plan to save by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. (Click the icon to view Present Value of $1 table.) (Click the icon to view Future Value of $1 table.) Read the requirements. (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $220,000 withdrawals.) (Round your final answer to the nearest whole dollar.) To make the plan work, you must accumulate this amount by retirement $ 2,073,940 Requirement 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing However, by age 40 you only need to have invested Requirements 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $220,000 withdrawals.) 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Print Done You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $220,000 per year for the next 30 years (based on family history, you think you will live to age 70). You plan to save by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. (Click the icon to view Present Value of $1 table.) (Click the icon to view Future Value of $1 table.) Read the requirements. (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $220,000 withdrawals.) (Round your final answer to the nearest whole dollar.) To make the plan work, you must accumulate this amount by retirement $ 2,073,940 Requirement 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing However, by age 40 you only need to have invested Requirements 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $220,000 withdrawals.) 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Print Done
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Related Book For
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
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