Interest on similar risk investments

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Part a ) Mary wants to spend $200,000 a year when she retires in 35 years.  She thinks her retirement fund can safely earn 5.0% a year.  About how much must Mary have in her account when she retires if she wants the account to last for 30 years?

$2,912,729

$3,074,490

$3,274,839

$6,000,00

Part b) What is the most you would pay for an annuity that will pay you $15,000 a year, starting today, for 20 years? You think that you must earn 9% interest on similar risk investments.

$300,000

$146,921

$149,252

$136,928

Reference no: EM131989780

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