Solution-Find how much must save at the end of each month

Find how much must save at the end of each month

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You have just inherited $100,000 and you are trying to decide how much you need to save each month to fund your retirement and future cash requirements. You will invest the entire $100,000. You will retire in 10 years time. You plan on living for 20 additional years. During retirement, you would like to receive income of $60,000 per year. The last contribution to your retirement fund occurs on the day you retire, and you receive your first payment one year after you retire.

Complicating this situation is your desire to have a three-year, around the world cruise. To finance this, you want to receive a one-time lump sum payment of $300,000 15 years after you retire. This is "over and above" your annual income of $60,000.
In addition, you would like to leave an inheritance of $100,000 to your children. Your retirement fund will earn nominal 10 percent, compounded monthly.

Required:

Problem 1: How much must you save at the end of each month for the next 10 years?

Reference no: EM132811456

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Find how much must save at the end of each month

Reference no: EM132811456

Reference no: EM132811456

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