How much per month will bilbo have to save

Reference no: EM131797921

Question: Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 25 years from now with a retirement income of $25,000 per month for 25 years. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $320,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $1,000,000 to his nephew, Frodo. He can afford to save $2,000 per month for the next five years. The monthly interest rate is 1%, and is expected to remain at 1% indefinitely. How much per month will Bilbo have to save between year 5 and year 25 in order to meet his goal?

Reference no: EM131797921

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