retires today with their savings of £350,000. They invest all the money in a bank account which pays 2.5% interest per year, compounded annually. They plan to withdraw £15,000 at the beginning of each year with the first withdrawal occurring immediately. They also plan to have a balance of £70,000 in the account for their children when they stop withdrawing the money from the account. For how many years could this couple make the £15,000 withdrawals a
retires today with their savings of £350,000. They invest all the money in a bank account which pays 2.5% interest per year, compounded annually. They plan to withdraw £15,000 at the beginning of each year with the first withdrawal occurring immediately. They also plan to have a balance of £70,000 in the account for their children when they stop withdrawing the money from the account. For how many years could this couple make the £15,000 withdrawals a
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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A couple retires today with their savings of £350,000. They invest all the money in a bank account which pays 2.5% interest per year, compounded annually. They plan to withdraw £15,000 at the beginning of each year with the first withdrawal occurring immediately. They also plan to have a balance of £70,000 in the account for their children when they stop withdrawing the money from the account. For how many years could this couple make the £15,000 withdrawals and still leave £70,000 for their children?
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