If you make an equal deposit at the end of every year to the account for the next 40 ears, what is the annual deposit? Assume that your first deposit occurs at the end of ext year. You retire after 40 years and have $8,000,000 in the account as planned. You expect olive for another 25 years after retirement. Assume that you leave the $8,000,000 in he account that continues to earn 8% annual return. You plan to make an equal withdrawal from the account every year for the next 25 years. The first withdrawal is nade at the end of the first year after your retirement and the account balance will be epleted after you make the 25th withdrawal. How much can you withdraw at the end of each year for the next 25 years?
If you make an equal deposit at the end of every year to the account for the next 40 ears, what is the annual deposit? Assume that your first deposit occurs at the end of ext year. You retire after 40 years and have $8,000,000 in the account as planned. You expect olive for another 25 years after retirement. Assume that you leave the $8,000,000 in he account that continues to earn 8% annual return. You plan to make an equal withdrawal from the account every year for the next 25 years. The first withdrawal is nade at the end of the first year after your retirement and the account balance will be epleted after you make the 25th withdrawal. How much can you withdraw at the end of each year for the next 25 years?
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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Transcribed Image Text:6. Your objective is to have $8,000,000 in an account that earns 8% annual return
when you retire in 40 years.
a) If you make an equal deposit at the end of every year to the account for the next 40
years, what is the annual deposit? Assume that your first deposit occurs at the end of
next year.
b) You retire after 40 years and have $8,000,000 in the account as planned. You expect
to live for another 25 years after retirement. Assume that you leave the $8,000,000 in
the account that continues to earn 8% annual return. You plan to make an equal
withdrawal from the account every year for the next 25 years. The first withdrawal is
made at the end of the first year after your retirement and the account balance will be
depleted after you make the 25th withdrawal. How much can you withdraw at the end
of each year for the next 25 years?
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