A retired couple plans to supplement their retirement income with monthly withdrawals of the interest earned on a retirement account which has a balance of $200,000. a. If the fund earns interest monthly at an APR of 6%, which the couple always withdraws from the account, how much is generated in interest each month? Round/take your answer to the nearest cent. Recall that APR stands for Annual Percentage Rate. %24 b. Estimate (to the nearest tenth of a percent) the annual interest rate needed for this couple to be able to earn $1,350 per month in interest from this $200,000 account. Round your answer to the nearest tenth of a percent, eg., 2.5%.

A retired couple plans to supplement their retirement income with monthly withdrawals of the interest earned on a retirement account which has a balance of $200,000. a. If the fund earns interest monthly at an APR of 6%, which the couple always withdraws from the account, how much is generated in interest each month? Round/take your answer to the nearest cent. Recall that APR stands for Annual Percentage Rate. %24 b. Estimate (to the nearest tenth of a percent) the annual interest rate needed for this couple to be able to earn $1,350 per month in interest from this $200,000 account. Round your answer to the nearest tenth of a percent, eg., 2.5%.

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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Concept explainers

Employer Pension Plan

An employer pension plan is a retirement benefit provided by an employer to employees before or after they retire. Over the course of the employees' working lives, the employer should invest a lump sum or make monthly contributions to investment schemes in employees' names. It is the employer's legal responsibility to provide employees with retirement plans that support them with guaranteed financial security in retirement.

Question

A retired couple plans to supplement their retirement income with
monthly withdrawals of the interest earned on a retirement account
which has a balance of $200,000.
a. If the fund earns interest monthly at an APR of 6%, which the couple
always withdraws from the account, how much is generated in interest
each month?
Round/take your answer to the nearest cent. Recall that APR stands for
Annual Percentage Rate.
24
b. Estimate (to the nearest tenth of a percent) the annual interest rate
needed for this couple to be able to earn $1,350 per month in interest
from this $200,000 account.
Round your answer to the nearest tenth of a percent, eg., 2.5%.

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