Withdraw money at the end of each year

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Reference no: EM13847159

Business Finance Homework

At the end of this year you deposit $3000 into a saving account. Each year you plan to increase the amount by 2%. If you can earn 5% in your savings account, how much money will you have in 20 years?

116,735

43,996

99,197

66,131.91

None of the above.

Suppose you have saved $1,000,000. You plan to withdraw money at the end of each year for the next 25 years (until you die). The bank pays 7% interest, and you expect to increase your withdrawal amount each year by the 3% inflation rate. How much can you withdraw the first year?

65,112.90

15,355.58

11,998.84

83,341.37

None of the above.

Reference no: EM13847159

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