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PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999 Exercise 4
Simon Fellows wishes to have $400,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump-sum deposit today.
a. If upon retirement in 20 years Simon plans to invest $400,000 in a fund that earns 5%, what is the maximum annual withdrawal he can make over the following 15 years?
b. How much would Simon need to have on deposit at retirement in order to withdraw $35,000 annually over the 15 years if the retirement fund earns 8%?
c. To achieve his annual withdrawal goal of $35,000 calculated in part
b. how much more than the amount calculated in part a must Simon deposit today in an investment earning 5% annual interest?
a. If upon retirement in 20 years Simon plans to invest $400,000 in a fund that earns 5%, what is the maximum annual withdrawal he can make over the following 15 years?
b. How much would Simon need to have on deposit at retirement in order to withdraw $35,000 annually over the 15 years if the retirement fund earns 8%?
c. To achieve his annual withdrawal goal of $35,000 calculated in part
b. how much more than the amount calculated in part a must Simon deposit today in an investment earning 5% annual interest?
Explanation
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a.
Find the per annum withdrawal over fi...
PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
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