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# Carl Wilfred wishes to have \$400000 in a retirement fund 20 years from now He can create the retirement fund by making a single lump sum deposit today a If he can earn 6% on his investments how

Carl Wilfred 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 he can earn 6% on his investments, how much must Carl deposit today to create the retirement fund? If he can earn only 4% on his investments? Compare and discuss the results of your calculations.

b. If upon retirement in 20 years Carl plans to invest the \$400,000 in a fund that earns 5%, what is the maximum annual withdrawal he can make over the following 15 years?

c. How much would Carl need to have on deposit at retirement to annually withdraw \$35,000 over the 15 years if the retirement fund earns 8%?

d. To achieve his annual withdrawal goal of \$35,000 calculated in part c, how much more than the amount calculated in part a must Carl deposit today in an investment earning 5% annual interest?

May 17 2020 View more View Less