After graduating from college with a bachelor of business administration, you be

Question

After graduating from college with a bachelor of business administration, you begin an ambitious plan to retire in 22.00 years. To build up your retirement fund, you will make quarterly payments into a mutual und hat on average will pay 10.20% APR compounded quarte To get you starte a relative eso a graduation g of ss.3 3.00 Once retired, you plan on moving your investment to a money market fund that will pay 5.04% APR with monthly compounding. As a young retiree, you believe you will live for 33.00 more years and will make monthly withdrawals of $10,812.00. (YOUR WITHDRAWALS ARE AT THE BEGINNING OF THE MONTH!!!) To meet your retirement needs, what quarterly payment should you make? Answer Format: Currency: Round to: 2 decimal places.

Explanation / Answer

first calculate the retirement corpus needed

FV = 0, PMT = 10,812.00, N = 33*12, rate = 5.04%/12

use PV function in Excel with type as 1

retirement corpus = 2,093,430.76

FV = -2,093,430.76, PV = 3,333, N = 22*4, rate = 10.20%/4

use PMT function in Excel

quarterly payments = 6439.09

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