How much do you need to invest annually

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Reference no: EM132039459

You decide that you need to save $150,000 to send your future kid to college 12 years from now.

a) How much do you need to invest today in an account earning 4% to have $150,000 in 12 years?

b) How much do you need to invest annually at the end of each of the next 12 years in an account earning 4% to have $150,000 in 12 years?

c) Alternatively, you decide not to have any kids and just want to save for retirement. At age sixty, you have accumulated $1,000,000. If this million is invested at a aggressive return of 10%, how much can you withdraw annually for a duration of 15 years (you would have nothing left at the end of these 15 years)?

d) Similarly, if this $1,000,000 is still invested at 10%, how much can you withdraw annually for a duration of 30 years (you would have nothing left at the end of these 30 years)?

Reference no: EM132039459

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