Suppose you retire with $1million at age of 65. You plan to invest your retirement into a mixture of a riky fund and a fixed income fund, where the return of the risky fund follows a normal distribution. You plans to withdraw $150,000 at the end of every year from this accout. To prevent overwithdrawal at the end, you put a safety cushion of 3 If balance of the retirement fund at the end of year, before annual withdrawal is less than 3 times the planned annual withdrawal amount, you withdraw one-third of the remaining balance. (Hint: use IF function) You want to find out how much you are left at the age of 75. Simulate one time to find out the remaining balance at the age of 17 ( 10 years later) Simulate 100 times, find out average, standard deviation, along with probabilty of the remaining fund is positive.
Suppose you retire with $1million at age of 65. You plan to invest your retirement into a mixture of a riky fund and a fixed income fund, where the return of the risky fund follows a normal distribution. You plans to withdraw $150,000 at the end of every year from this accout. To prevent overwithdrawal at the end, you put a safety cushion of 3 If balance of the retirement fund at the end of year, before annual withdrawal is less than 3 times the planned annual withdrawal amount, you withdraw one-third of the remaining balance. (Hint: use IF function) You want to find out how much you are left at the age of 75. Simulate one time to find out the remaining balance at the age of 17 ( 10 years later) Simulate 100 times, find out average, standard deviation, along with probabilty of the remaining fund is positive.
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter13: Investing In Mutual Funds, Etfs, And Real Estate
Section: Chapter Questions
Problem 8FPE
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Suppose you retire with $1million at age of 65.
You plan to invest your retirement into a mixture of a riky fund and a fixed income fund, where the return of the risky fund follows a
You plans to withdraw $150,000 at the end of every year from this accout.
To prevent overwithdrawal at the end, you put a safety cushion of 3
If balance of the retirement fund at the end of year, before annual withdrawal is less than 3 times the planned annual withdrawal amount, you withdraw one-third of the remaining balance. (Hint: use IF function)
You want to find out how much you are left at the age of 75.
- Simulate one time to find out the remaining balance at the age of 17 ( 10 years later)
- Simulate 100 times, find out average, standard deviation, along with probabilty of the remaining fund is positive.
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