Question
In: Finance
Assume that 25 years ago your dad invested $340,000, plus $25,000 in years 2 through 5,...
Assume that 25 years ago your dad invested $340,000, plus $25,000 in years 2 through 5, and $49,000 per year from year 6 on.
At a very good interest rate of 14% per year
A) determine the CC value.
B) The annual retirement amount the he can withdraw forever starting next year (year 26), if no additional investments are made.
Solutions
Expert Solution
A Value after 25 years =
| $14,557,386.20 |
B: Amount that can be withdrawn = Amount* rate =14557386.20* 15% =
= 2183607.93
WORKINGS
| Year | Term | Amount | FV of investment |
| 0 | 25 | 340000 | $8,997,051.38 |
| 2 | 23 | 25000 | $509,039.62 |
| 3 | 22 | 25000 | $446,525.99 |
| 4 | 21 | 25000 | $391,689.46 |
| 5 | 20 | 25000 | $343,587.25 |
| 6 onwards | 19 | 49000 | $3,869,492.50 |
| Total value | $14,557,386.20 |
jeff jeffy answered 4 days agoRelated Solutions
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Assume that 25 years ago your dad invested $200,000, plus
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