What is the amount of the nest egg needed

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Reference no: EM13813491

Your uncle wants to retire in 20 years and expects his retirement to last 25 years. He wants to take out (i.e., withdraw) $2,500 at the end of every month over those 25 years. Assume that he can earn 6% per year on his investments.

a) First, what is the amount of the "nest egg" needed in 20 years?

b) What amount today does he need to put away in order to achieve that "nest egg"? Note that he is putting away one lump sum today, not an annuity.

Reference no: EM13813491

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