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A woman plans to retire in 40 years, and she expects to live for 30 years...

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Finance

A woman plans to retire in 40 years, and she expects to live for30 years after that. She wants to spend 10,000 a month after sheretires. To finance her retirement she is going to invest monthly(with her investment one month from know) over 40 years at 12.6%.After she retires she will move her investment to a more liquidaccount earning 7.2% a year. Ignore taxes and transaction costs.How much does she have to sabe a month until her retirement.

Finance 311, intermediate finance

Answer & Explanation Solved by verified expert
3.9 Ratings (446 Votes)
Retirement Tenure 30 years or 30 x 12 360 months Rate of Return post Retirement 72 Applicable Monthly Rate 72 12 06 and Monthly Withdrawals Post    See Answer
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A woman plans to retire in 40 years, and she expects to live for30 years after that. She wants to spend 10,000 a month after sheretires. To finance her retirement she is going to invest monthly(with her investment one month from know) over 40 years at 12.6%.After she retires she will move her investment to a more liquidaccount earning 7.2% a year. Ignore taxes and transaction costs.How much does she have to sabe a month until her retirement.Finance 311, intermediate finance

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