What is the present value of this investment

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Reference no: EM131841000

1. The first year after you retire you want to be able to withdraw $100,000 from your savings account. Every year after that you want to increase your withdrawals by 2%. You expect that the account will earn 6% annual interest. How much money must you have in your savings account when you retire to make sure that your money lasts for 20 years?

$1,146,992.12

None of the Above

$1,341,686.45

$4,302,970.19

$1,635,143.33

2. You win a scratch off lottery ticket that promises to pay an initial payment of 10,000 this year and grow at a rate of 5% forever. If the discount rate is 8%, what is the present value of this investment?

$350,000.00

$400,000.00

$300,000.00

$500,000.00

None of the above

Reference no: EM131841000

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