A young couple plans on investing 12.00% of their joint income every year until retirer income in their first year of work will be $89,531.00. They believe their joint income will increase by 2.00% per year during their working life. Their investments will earn 7.00% per year on average. They plan on their retirement lasting 25.00 years. They want to leave $134,412.00 to the American Cancer Society at end of their retirement. Based on these assumptions, what yearly withdrawal can they make during retirement? (assu that the withdrawals are at the beginning of the year) Submit Answer format: Currency: Round to: 2 decimal places. Show Hint

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 10P
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A young couple plans on investing 12.00% of their joint income every year until retirement. (31.00 years). Their joint
income in their first year of work will be $89,531.00. They believe their joint income will increase by 2.00% per year
during their working life. Their investments will earn 7.00% per year on average.
They plan on their retirement lasting 25.00 years. They want to leave $134,412.00 to the American Cancer Society at the
end of their retirement. Based on these assumptions, what yearly withdrawal can they make during retirement? (assume
that the withdrawals are at the beginning of the year)
Submit
Answer format: Currency: Round to: 2 decimal places.
Show Hint
Transcribed Image Text:A young couple plans on investing 12.00% of their joint income every year until retirement. (31.00 years). Their joint income in their first year of work will be $89,531.00. They believe their joint income will increase by 2.00% per year during their working life. Their investments will earn 7.00% per year on average. They plan on their retirement lasting 25.00 years. They want to leave $134,412.00 to the American Cancer Society at the end of their retirement. Based on these assumptions, what yearly withdrawal can they make during retirement? (assume that the withdrawals are at the beginning of the year) Submit Answer format: Currency: Round to: 2 decimal places. Show Hint
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