(Future value of an annuity and annuity​ payments) You are trying to plan for retirement in 12 ​years, and currently you have ​$210,000 in a savings account and ​$350,000 in stocks. In​ addition, you plan to deposit ​$9,000 per year into your savings account at the end of each of the next 6 ​years, and then ​$12,000 per year at the end of each year for the final 6 years until you retire. a. Assuming your savings account returns 8 percent compounded​ annually, and your investment in stocks will return 12 percent compounded​ annually, how much will you have at the end of 12 ​years? ​ (Ignore taxes.) b. If you expect to live for 15 years after you​ retire, and at retirement you deposit all of your savings into a bank account paying 11 ​percent, how much can you withdraw each year after you retire​ (making 15 equal withdrawals beginning one year after you​ retire) so that you end up with a​ zero-balance at​ death?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(Future value of an annuity and annuity​ payments) You are trying to plan for retirement in 12 ​years, and currently you have ​$210,000 in a savings account and ​$350,000 in stocks. In​ addition, you plan to deposit ​$9,000 per year into your savings account at the end of each of the next 6 ​years, and then ​$12,000 per year at the end of each year for the final 6 years until you retire. a. Assuming your savings account returns 8 percent compounded​ annually, and your investment in stocks will return 12 percent compounded​ annually, how much will you have at the end of 12 ​years? ​ (Ignore taxes.) b. If you expect to live for 15 years after you​ retire, and at retirement you deposit all of your savings into a bank account paying 11 ​percent, how much can you withdraw each year after you retire​ (making 15 equal withdrawals beginning one year after you​ retire) so that you end up with a​ zero-balance at​ death?

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