BH 2-19 Future value of an annuity. Your client is 40 years old and she wants to begin saving for retirement with the first payment to come one year from now.
BH Fundamentals of financial management By Eugene F. Brigham, Joel F. Houston
Fundamentals of financial management Fifth edition Chapter 2 Time Value money
BH 2-19 Future value of an annuity. Your client is 40 years old and she wants to begin saving for retirement with the first payment to come one year from now. She can save $5000 per year and you advise her to invest it in the stock market, which you expect to provide an average return of 9 percent in the future.
a. If she follows your advice, how much money would she have at 65?
b. How much would she have at 70?
c. If she expects to live for 20 years in retirement if she retires at 65 and for 15 years at 70, and her investments continue to earn the same rate, how much could she withdraw at the end of each year after retirement at each retirement age?
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