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What will be the total value of his investments

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Your mother is 50 years old and plans to retire at the age of 80. She currently has a stock portfolio worth $500,000. The portfolio is expected to earn a return of 10 percent per year.

-If your mom does not save another penny, what will be the total value of his investments when he retires at age 80?

-Assume she plans to invest an additional $13,000 every year in her portfolio for the next 20 years (starting one year from now). How much will his investments be worth when he retires at 80?

-Assume that your mom expects to live 10 years after she retires (i.e., until age 90). Today, at age 50, she takes all of his investments and places them in an account that pays 5 percent per year (use the scenario from part b in which he continues saving and assume that the additional savings also earn a return of 10 percent per year). If she starts withdrawing funds starting on the day he turns 81, how much can she withdraw every year and leave nothing in the account after a 10th and final withdrawal on the day she turns 90?

Reference no: EM132555195

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