Find monthly savings, Bilbo Baggins wants to save money to

Find monthly savings

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Reference no: EM13726073

Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with a retirement income of $32,000 per month for 20 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $400,000. Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $850,000 to his nephew Frodo. He can afford to save $3,700 per month for the next 10 years. If he can earn a EAR of 10 percent before he retires and a EAR of 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

Find Monthly Savings

Reference no: EM13726073

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