-Your 40 year aunt wants to start saving for her retirement. She expects to retire at 65....
Question:
-Your 40 year aunt wants to start saving for her retirement. She expects to retire at 65. She thinks that she will have saved $500,000 by the time she retires. She expects of live to 90.
a) How much annual cash flow will your aunt have if she expects her retirement fund return to be 8% per year compounded annually. Assume she makes her first annual withdrawal at the end of the first year of retirement, and the last withdrawal when she turns 90.
b) Assuming a), at age 75, how much does she have left in her retirement account?
c) If she starts making twice per month deposits this year, how much will she have to deposit each period in order to exactly get to meet her retirement goal ($500,000 by the time she retires)? Effectively, your aunt still intends to earn 8% return annually.
Fundamentals Of Corporate Finance
ISBN: 9780072553079
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan