Question

In: Finance

Clara plans to retire in fifteen years. She has just deposited $100,000 in a bank that...

Clara plans to retire in fifteen years. She has just deposited $100,000 in a bank that pays 8% interest and compounds MONTHLY. Upon retirement, she plans to withdraw $3,000 per MONTH. How long (in years) will Clara be able to maintain that lifestyle?

Select one:

a. 16.65

b. 9.19

c. 17.25

d. 15.86

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Anna just turned 55. She is planning to retire in 10 years, and she currently has...
Anna just turned 55. She is planning to retire in 10 years, and she currently has $500,00 in her 401k fund. She assumes that she will live 20 years past her retirement age. During each of these 20 years, she desires to withdraw $100,000 from her retirement fund. If the interest rate is 5% annually, how much will Anna have to save per year for the next 10 years (from 55 to 64)? Assume that the first deposit to her...
Anna just turned 55. She is planning to retire in 10 years, and she currently has...
Anna just turned 55. She is planning to retire in 10 years, and she currently has $500,00 in her 401k fund. She assumes that she will live 20 years past her retirement age. During each of these 20 years, she desires to withdraw $100,000 from her retirement fund. If the interest rate is 5% annually, how much will Anna have to save per year for the next 10 years (from 55 to 64)? Assume that the first deposit to her...
A woman plans to retire in 40 years, and she expects to live for 30 years...
A woman plans to retire in 40 years, and she expects to live for 30 years after that. She wants to spend 10,000 a month after she retires. To finance her retirement she is going to invest monthly (with her investment one month from know) over 40 years at 12.6%. After she retires she will move her investment to a more liquid account earning 7.2% a year. Ignore taxes and transaction costs. How much does she have to sabe a...
Betsy Birdsong, an interior designer, has made plans to definitely retire in three years. She has...
Betsy Birdsong, an interior designer, has made plans to definitely retire in three years. She has begun to downsize her business and is moving out of the 2,000 square foot commercial condominium she owns in a prestigious business park. Betsy does not wish to sell at this time, so she has decided to offer the condominium as a lease-purchase option. While she hasn't decided on a purchase price, she is adamant about the lease term:   a three-year lease with a...
Tyler plans to retire in 20 years and has just established a personal retirement account where...
Tyler plans to retire in 20 years and has just established a personal retirement account where the annual return rate is 8%. If at the end of every month in the coming 20 years, Tyler will deposit $500 in the retirement account, what’s the monthly amount (at the end of each month) he can withdraw from this retirement account in the 10 years after retirement
Today is Sofia’s 35th birthday. She plans to retire in 32 years at the age of...
Today is Sofia’s 35th birthday. She plans to retire in 32 years at the age of 67, with expected life expectancy of 30 years after that. To maintain her life style, she thinks she will have to withdraw $8,000 from retirement account at the beginning of each month during retirement. Meanwhile, she plans to donate $100 to charity starting on her 70th birthday, and the monthly payment will continue till she passes away. In addition, she would like to establish...
Irene plans to retire on January 1, 2020. She has been preparing to retire by making...
Irene plans to retire on January 1, 2020. She has been preparing to retire by making annual deposits, starting on January 1, 1980, of 2100 dollars into an account that pays an effective rate of interest of 7.2 percent. She has continued this practice every year through January 1, 2001. Her goal is to have 1.35 million dollars saved up at the time of her retirement. How large should her annual deposits be (from January 1, 2002 until January 1,...
Irene plans to retire on January 1, 2020. She has been preparing to retire by making...
Irene plans to retire on January 1, 2020. She has been preparing to retire by making annual deposits, starting on January 1, 1980, of 2050 dollars into an account that pays an effective rate of interest of 7.5 percent. She has continued this practice every year through January 1, 2001. Her goal is to have 1.25 million dollars saved up at the time of her retirement. How large should her annual deposits be (from January 1, 2002 until January 1,...
Ms. Smith plans to retire in 25 years (she will be 65). The IRS longevity table...
Ms. Smith plans to retire in 25 years (she will be 65). The IRS longevity table forecasts that Ms. Smith will live to be 85 years old. Ms. Smith is expected to have 20 years in retirement. Ms. Smith needs to be able to withdraw $60,000 annually (end of each year) from her retirement investment account before the balance is fully used. This plus her $35,000 annually in social security benefits will serve her needs (she believes). During her 20...
Your Aunt Ruth has $340,000 invested at 7%, and she plans to retire. She wants to...
Your Aunt Ruth has $340,000 invested at 7%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her funds, i.e., run the account down to zero? 15 13 12 16 14
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT