Solution-How much do you expect to have saved when you

How much do you expect to have saved when you retire

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Reference no: EM133082302

You are presently 25 years old and intend to retire at age 65. You anticipate to live until you are 95. You need to save sufficient funds in the next 40 years to provide for yourself for the subsequent 30 years of retirement. So, you make a lump sum deposit of $12,000 now. Additionally, you make annual contribution to the same account which earns an average of 9.2% APR, compounded annually. At the end of 40 years, you transfer all your funds into another account earning 7.2% APR, compounded monthly. You estimate you will need a monthly income of $5200 throughout retirement.

Question 1: How much do you expect to have saved when you retire?

Question 2: How much of the amount you expect to have saved when you retire is from your lump sum investment?

Question 3: How much must you invest annually during the 40 years of savings to achieve your expected standard of living when you retire?

Reference no: EM133082302

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How much do you expect to have saved when you retire

Reference no: EM133082302

Reference no: EM133082302

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