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  You are trying to plan for retirement in 10 ​years, and currently you have ​$180,000 in...

  You are trying to plan for retirement in 10 ​years, and currently you have ​$180,000 in a savings account and ​$300,000 in stocks. In​ addition, you plan to deposit ​$12,000 per year into your savings account at the end of each of the next 5 ​years, and then ​$14,000 per year at the end of each year for the final 5 years until you retire.

a.  Assuming your savings account returns 6 percent compounded​ annually, and your investment in stocks will return 10 percent compounded​ annually, how much will you have at the end of 10 ​years? ​ (Ignore taxes.)

b.  If you expect to live for 16 years after you​ retire, and at retirement you deposit all of your savings into a bank account paying 9 ​percent, how much can you withdraw each year after you retire​ (making 16 equal withdrawals beginning one year after you​ retire) so that you end up with a​ zero-balance at​ death?

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jeff jeffy answered 2 years ago
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