Suppose you are 35 years old and would like to retire at age 65. Furthermore, you would like to have a retirement fund from which you can draw an income of $50,000 per year–forever! How much would you need to deposit each month to dothis? Assume a constant APR of 8% and that the compounding and payment periods are the same.
Suppose you are 35 years old and would like to retire at age 65. Furthermore, you would like to have a retirement fund from which you can draw an income of $50,000 per year–forever! How much would you need to deposit each month to dothis? Assume a constant APR of 8% and that the compounding and payment periods are the same.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 23P
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Suppose you are 35 years old and would like to retire at age 65. Furthermore, you would like to have a retirement fund from which you can draw an income of $50,000 per year–forever!
How much would you need to deposit each month to dothis? Assume a constant APR of 8% and that the compounding and payment periods are the same.
How much would you need to deposit each month to dothis? Assume a constant APR of 8% and that the compounding and payment periods are the same.
To draw $50,000 per year, there must be $ in your savings account when you retire.
You can reach your goal by making monthly deposits of
$
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