It has been 5 and a half years since you have started your career out of college at W.P. Carey Inc. In those 5 and a half years you saved $500 at the end of each month and placed this money in your Charles Schwab investing account. You realized that you have a bright future ahead of you with a few challenging goals in mind. In 25 years, you would like t buy your dream home for $4,500,000 in cash. You would also like to retire in 35 years. For 25 years after retirement, you would like to receive an income of $30,000 at the beginning of each month which will grow at 2.5% EAR. You would also like to purchase a lake-house where your family can vacation 10 years into retirement, which will have a required monthly payment of $7,325 for 15 years. You would like to leave a trust with $1,000,000 for each of your three children which they can access in 60 years from now. The EAR from five years ago until 35 years from now is 12% and the EAR after retirement starts is 9%. What is the amount of money you need to put into your Charles Schwab investing account from now until you buy your dream house at the end of each month to feasibly accomplish all of these goals?
It has been 5 and a half years since you have started your career out of college at W.P. Carey Inc. In those 5 and a half years you saved $500 at the end of each month and placed this money in your Charles Schwab investing account. You realized that you have a bright future ahead of you with a few challenging goals in mind. In 25 years, you would like t buy your dream home for $4,500,000 in cash. You would also like to retire in 35 years. For 25 years after retirement, you would like to receive an income of $30,000 at the beginning of each month which will grow at 2.5% EAR. You would also like to purchase a lake-house where your family can vacation 10 years into retirement, which will have a required monthly payment of $7,325 for 15 years. You would like to leave a trust with $1,000,000 for each of your three children which they can access in 60 years from now. The EAR from five years ago until 35 years from now is 12% and the EAR after retirement starts is 9%. What is the amount of money you need to put into your Charles Schwab investing account from now until you buy your dream house at the end of each month to feasibly accomplish all of these goals?
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:It has been 5 and a half years since you have started your career out of college at W.P. Carey Inc. In those 5 and a half
years you saved $500 at the end of each month and placed this money in your Charles Schwab investing account. You
realized that you have a bright future ahead of you with a few challenging goals in mind. In 25 years, you would like t
buy your dream home for $4,500,000 in cash. You would also like to retire in 35 years. For 25 years after retirement, you
would like to receive an income of $30,000 at the beginning of each month which will grow at 2.5% EAR. You would also
like to purchase a lake-house where your family can vacation 10 years into retirement, which will have a required
monthly payment of $7,325 for 15 years. You would like to leave a trust with $1,000,000 for each of your three children
which they can access in 60 years from now. The EAR from five years ago until 35 years from now is 12% and the EAR
after retirement starts is 9%.
What is the amount of money you need to put into your Charles Schwab investing account from now until you buy your
dream house at the end of each month to feasibly accomplish all of these goals?
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