Mark Smith wants to save money to meet two objectives. First, he would like to be able to retire 20 years from now and have a retirement income of $30000 per year for at least 30 years. Second, he would like to purchase a fishing boat 5 years from now at an estimated cost of $20000. He can afford to save only $6000 per year for the first 10 years. Mark expects to earn 8% per year on average from investments over the next 50 years. What must his minimum annual saving be from years 11 through 20 to meet his objectives?

Mark Smith wants to save money to meet two objectives. First, he would like to be able to retire 20 years from now and have a retirement income of $30000 per year for at least 30 years. Second, he would like to purchase a fishing boat 5 years from now at an estimated cost of $20000. He can afford to save only $6000 per year for the first 10 years. Mark expects to earn 8% per year on average from investments over the next 50 years. What must his minimum annual saving be from years 11 through 20 to meet his objectives?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 35P

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