You are planning to save for retirement over the next 25 years. To do this, you

Question

You are planning to save for retirement over the next 25 years. To do this, you will invest $790 a month in a stock account and $390 a month in a bond account. The return of the stock account is expected to be 9.9 percent, and the bond account will pay 5.9 percent. When you retire, you will combine your money into an account with an 6.9 percent return.

How much can you withdraw each month from your account assuming a 20-year withdrawal period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

You are planning to save for retirement over the next 25 years. To do this, you will invest $790 a month in a stock account and $390 a month in a bond account. The return of the stock account is expected to be 9.9 percent, and the bond account will pay 5.9 percent. When you retire, you will combine your money into an account with an 6.9 percent return.

How much can you withdraw each month from your account assuming a 20-year withdrawal period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

the value of investmene after 25 years:

in stocks $790X12X25= $237,000 with an expected return of 9.9% per annum

= $237,000X96.245= $22,810,065

if he wants to withdrew it in next 20 years then the value for each month:

= $22,810,065/20= $1,140,503 per year

and per month it is $95,040

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