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to earn 7.00% per year and the expected inflation rate is 2.00% per year. How much does Deshawn need to set aside in real terms at the end of each of the next 46 years to meet his retirement goal?

to earn 7.00% per year and the expected inflation rate is 2.00% per year. How much does Deshawn need to set aside in real terms at the end of each of the next 46 years to meet his retirement goal?

Essentials Of Investments
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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Question 27 7.5 pts Deshawn, who turned 21 years old today, is planning for retirement. Deshawn is just starting his first full time job and has nothing set aside in his retirement account. He plans to add an equal amount in real terms at the end of each of the next 46 years so that he can retire at age 67. His goal is to build a retirement account that will enable him to make 30 annual withdraws with a purchasing power of $60,000 (at today's prices) on his 68th through 97th birthdays. His retirement account is expected to earn 7.00% per year and the expected inflation rate is 2.00% per year. How much does Deshawn need to set aside in real terms at the end of each of the next 46 years to meet his retirement goal? Round your answer to the nearest penny. For example, $2,371.243 should be entered as 2371.24
Transcribed Image Text:Question 27 7.5 pts Deshawn, who turned 21 years old today, is planning for retirement. Deshawn is just starting his first full time job and has nothing set aside in his retirement account. He plans to add an equal amount in real terms at the end of each of the next 46 years so that he can retire at age 67. His goal is to build a retirement account that will enable him to make 30 annual withdraws with a purchasing power of $60,000 (at today's prices) on his 68th through 97th birthdays. His retirement account is expected to earn 7.00% per year and the expected inflation rate is 2.00% per year. How much does Deshawn need to set aside in real terms at the end of each of the next 46 years to meet his retirement goal? Round your answer to the nearest penny. For example, $2,371.243 should be entered as 2371.24
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