Author Question: You plan to retire at age 65. You want to withdraw $100,000 from your savings account every year ... (Read 33 times)

fasfsadfdsfa · **on:** Apr 25, 2021

Question 1

You have the opportunity to buy a perpetuity which pays $1,000 annually. Your required rate of return on this investment is 15 percent. You should be essentially indifferent to buying or not buying the investment if it were offered at a price of
◦ $5,000.00.
◦ $6,000.00.
◦ $6,666.67.
◦ $7,500.00.
◦ $8,728.50.

Question 2

You plan to retire at age 65. You want to withdraw $100,000 from your savings account every year starting on your 65th birthday. You expect to make your final withdrawal on your 84th birthday. How much must you have accumulated by your 65th birthday in order to support your desired withdrawals if you earn 3% on your savings?
◦ $1,532,379.91
◦ $1,587,747.49
◦ $1,475,351.31
◦ $1,432,379.91
◦ $1,090,095.56

b614102004 · **Reply #1 on:** Apr 25, 2021

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