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You are planning for your retirement and have decided the following: you will retire in 35 years and will make monthly deposits into your retirement account of $400 for the next 15 years and then monthly deposits of $800 for the remaining 20 years until retirement. This account earns a 7% rate of return, compounded monthly.

In addition, you will inherit $50,000 7 years from today. The inheritance will be deposited into an account that will earn 10% per year until year 20 and then 15% per year after that (compounded annually).

How much will you have when you retire? Explain how you determined this figure.

If, when you retire, you place the full amount of your retirement savings into an account that earns 4% per year, compounded annually, how much can you withdraw per year in perpetuity?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92827309

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