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Finance Problem: 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 5,000 per year, and you advise her to invest it in the stock market, average return of 9%.
I figured out that at 65 she would have saved: $423,504.48. At 70 she would save: 681,537.69.
The question then asks if she expects to live for 20 years in retirement if she retires at 65 and 15 years if she retires at 70, at the same interest rate....how much could she withdraw at the end of each year after retirement at each retirement age?
I just need some help in the right direction for the final part of this problem. Thanks in advance.
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