Retirement fund-what is the maximum annual withdrawal

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Reference no: EM131050906

Bob Jenkins wishes to have $800,000 in a retirement fund 20 years from now.

He can create the retirement fund by making a single lump-sum deposit today.

a. If upon retirement in 20 years, Bob plans to invest $800,000 in a fund that earns 4%, what is the maximum annual withdrawal he can make over the following 15 years?

b. How much would Bob need to have on deposit at retirement in order to withdraw $35,000 annually over 15 years if the retirement fund earns 4%?

c. To achieve his annual withdrawal goal of $35,000 calculated in part B, How much more than the amount calculated in part A must Bob deposit today in an investment earning 4% annual interest?

Reference no: EM131050906

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