Save money to meet three objectives

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Reference no: EM131875341

Bilbo Baggins wants to save money to meet three objectives.

First, he would like to be able to retire 30 years from now with a retirement income of $29,500 per month for 20 years, with the first payment received 30 years and 1 month from now.

Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $375,000.

Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $975,000 to his nephew Frodo. He can afford to save $3,200 per month for the next 10 years. If he can earn an EAR of 10 percent before he retires and an EAR of 7 percent after he retires, how much will he have to save each month in Years 11 through 30? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Monthly savings $

Reference no: EM131875341

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