Calculate the amount of the monthly deposit sarah must make

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It is Sarah's 21st birthday today and she has received an inheritance of $50,000 from her grandfather. Sarah will spend one-half of this inheritance, and use the rest to start a retirement savings fund. She plans to retire on her 67th birthday and she expects her retirement will last for twenty-five years. Sarah has set up a retirement savings fund that pays interest of 4.05 percent compounded monthly. When she retires, Sarah will transfer part of the proceeds of her retirement savings fund to a fund that will give her income payments of $4000 per month in advance during retire- ment. Her retirement income fund will pay interest of 31 2 percent compounded monthly. Sarah will use the rest of the proceeds of her retirement savings fund to set up a fund from which she plans to bequeath $500,000 to her grand- children on her 80th birthday. Her bequest fund will pay interest of 41 2 percent compounded annually. Calculate the amount of the monthly deposit Sarah must make into her retirement savings fund in order to fulfill her retirement income and bequest goals.

Reference no: EM13202474

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