You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $200,000 per year for the next 30 years (based on family history, you think you will live to age 70). You plan to save by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. Read the requirements. View the Present Value of $1 table. View the Future Value of $1 table. View the Present Value of Ordinary Annuity of $1 table. View the Future Value of Ordinary Annuity of $1 table. Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $200,000 withdrawals.) (Round your final answer to the nearest whole dollar.) Money to be accumulated by the time of retirement = Requirements 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $200,000 withdrawals.) 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Print Done ✗
You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $200,000 per year for the next 30 years (based on family history, you think you will live to age 70). You plan to save by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. Read the requirements. View the Present Value of $1 table. View the Future Value of $1 table. View the Present Value of Ordinary Annuity of $1 table. View the Future Value of Ordinary Annuity of $1 table. Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $200,000 withdrawals.) (Round your final answer to the nearest whole dollar.) Money to be accumulated by the time of retirement = Requirements 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $200,000 withdrawals.) 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Print Done ✗
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
Related questions
Question
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Transcribed Image Text:You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $200,000 per year for the next 30 years (based on family history,
you think you will live to age 70). You plan to save by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will earn 10% per year. You will
leave the money in this fund until it is completely depleted when you are 70 years old.
Read the requirements.
View the Present Value of $1 table.
View the Future Value of $1 table.
View the Present Value of Ordinary Annuity of $1 table.
View the Future Value of Ordinary Annuity of $1 table.
Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $200,000 withdrawals.) (Round your final answer to the nearest
whole dollar.)
Money to be accumulated by the time of retirement =
Requirements
1. How much money must you accumulate by retirement to make your plan work? (Hint: Find
the present value of the $200,000 withdrawals.)
2. How does this amount compare to the total amount you will withdraw from the investment
during retirement? How can these numbers be so different?
Print
Done
✗
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