Answered: ohn wants to retire with $10,000 per…

ohn wants to retire with $10,000 per month, how much principal is necessary to generate this amount of monthly income if the intere

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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If John wants to retire with $10,000 per month, how much principal is necessary to generate this amount of monthly income if the interest rate is 15%?t

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George plans to retire in 15 years. His current household expenses are $91000 per year. He estimates that when he retires, he will no longer have $4400 in monthly mortgage payments, $6600 in annual commuting expenses, and $28000 in annual budgeted 401(k) contributions. However, he does expect that his health-care costs will rise by $5300 per year and his entertainment expenses to total $8800 each year. What will be his estimated retirement expenses, in today’s dollars, if using the adjusted expense method? $17700 $8950 $60800
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