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eBook Chapter 2 Financial Planning Exercise 7 Funding a retirement goal Austin Miller wishes to have $400,000 in a retirement fund 25 years from now. He can create the retirement fund by making a

eBook

Chapter 2
Financial Planning Exercise 7
Funding a retirement goal

Austin Miller wishes to have $400,000 in a retirement fund 25 years from now. He can create the retirement fund by making a single lump-sum deposit today. Use next table to solve the following problems.

  1. If upon retirement in 25 years, Austin plans to invest $400,000 in a fund that earns 8%, what is the maximum annual withdrawal he can make over the following 20 years? Round the answer to the nearest cent. Round PVA-factor to three decimal places.
    Calculate your answer based on the PVA-factor.

    $  


    Calculate your answer based on the financial calculator.

    $  

  2.  
  3. How much would Austin need to have on deposit at retirement in order to withdraw $45,000 annually over the 20 years if the retirement fund earns 8%? Round the answer to the nearest cent. Round PVA-factor to three decimal places.
    Calculate your answer based on the PVA-factor.

    $  


    Calculate your answer based on the financial calculator.

    $  

  4.  
  5. To achieve his annual withdrawal goal of $45,000 calculated in part b, how much more than the amount calculated in part a must Austin deposit today in an investment earning 8% annual interest? Round PVA-factor to three decimal places. Round your answer to the nearest cent. If an amount is zero, enter "0".

    $  

Apr 23 2021 View more View Less

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