You are currently 25 years old and landed your first job. Your retirement plan will make monthly contributions for $1,000 for the next 40 years. Assume your portfolio puts $600 into the S&P 500 which receives an average 12% annual return and $400 into a bond fund which will give a 8% annual return. If you retire at 65 and plan to live until you’re 90, what can you withdraw monthly assuming a risk-free rate of 4%?

You are currently 25 years old and landed your first job. Your retirement plan will make monthly contributions for $1,000 for the next 40 years. Assume your portfolio puts $600 into the S&P 500 which receives an average 12% annual return and $400 into a bond fund which will give a 8% annual return. If you retire at 65 and plan to live until you’re 90, what can you withdraw monthly assuming a risk-free rate of 4%?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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