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2. An employee plans on working and contributing to his retirement account monthly for 32 years and then plans to live off his retirement savings for the next 35 years. He expects his retirement account to eam an APR of 6.3% compounded monthly. He can afford to make S500 monthly contributions to his retirement account. How much money can he withdraw from the account monthly during the 35 years of his retirement?

2. An employee plans on working and contributing to his retirement account monthly for 32 years and then plans to live off his retirement savings for the next 35 years. He expects his retirement account to eam an APR of 6.3% compounded monthly. He can afford to make S500 monthly contributions to his retirement account. How much money can he withdraw from the account monthly during the 35 years of his retirement?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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answer the 2nd question, please.

1. An employee plans on working and contributing to his retirement account monthly for 30 years and then plans to live off his retirement savings for the next 27 years. He expects his retirement account to eam an APR of 7.5% compounded monthly. If he wants to make $3000 monthly withdrawals from his account during retirement, how much should he contribute to his retirement account monthly during his working years? 2. An employee plans on working and contributing to his retirement account monthly for 32 years and then plans to live off his retirement savings for the next 35 years. He expects his retirement account to eam an APR of 6.3% compounded monthly. He can afford to make S500 monthly contributions to his retirement account. How much money can he withdraw from the account monthly during the 35 years of his retirement? Hints and Assumptions: i. At the end of the retirement period the account will be empty ii. The PV at the time when retirement begins is the FV goal while working, so you'll need to do the problem in 2 steps.
Transcribed Image Text:1. An employee plans on working and contributing to his retirement account monthly for 30 years and then plans to live off his retirement savings for the next 27 years. He expects his retirement account to eam an APR of 7.5% compounded monthly. If he wants to make $3000 monthly withdrawals from his account during retirement, how much should he contribute to his retirement account monthly during his working years? 2. An employee plans on working and contributing to his retirement account monthly for 32 years and then plans to live off his retirement savings for the next 35 years. He expects his retirement account to eam an APR of 6.3% compounded monthly. He can afford to make S500 monthly contributions to his retirement account. How much money can he withdraw from the account monthly during the 35 years of his retirement? Hints and Assumptions: i. At the end of the retirement period the account will be empty ii. The PV at the time when retirement begins is the FV goal while working, so you'll need to do the problem in 2 steps.
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