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
Related questions
Question
5
Transcribed Image Text:30.
A 65-year-old individual with $250,000 of retirement savings targets fixed replacement income for the next 20 years.
What is the maximum affordable income assuming the following zero-coupon yield curve?
Maturity (years)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Zero-coupon yeild (%)
2.85
3.08
3.14
3.16
3.16
3.17
3.18
3.19
3.20
3.22
3.24
3.26
3.28
3.30
3.32
3.34
3.36
3.37
3.39
3.41
$9,745 / year
O $12,531 / year
O
$15,438 / year
O $17,327 / year
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