You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time which will allow you an annual withdrawal of $100.000 every year for 30 years. The average interest rate between now and the 20th year is likely to be 4% p.a. from then onwards, for the next 30 years it is likely to be 6% p.a. How much should you save in an interest-bearing account at the end of each month to be able to have enough money at the time of retirement, which will allow you your desired withdrawal of $100,000 every year for 30 years after retirement?
You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time which will allow you an annual withdrawal of $100.000 every year for 30 years. The average interest rate between now and the 20th year is likely to be 4% p.a. from then onwards, for the next 30 years it is likely to be 6% p.a.
How much should you save in an interest-bearing account at the end of each month to be able to have enough money at the time of retirement, which will allow you your desired withdrawal of $100,000 every year for 30 years after retirement? Assume that the interest in the interest-bearing account is compounded monthly. Show working without excel.
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