Time value of money for bill shaffer

Reference no: EM1330495

1. Bill Shaffer wishes to have $200,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump-sum deposit today.

a. If he can earn 10 percent on his investments, how much must Bill deposit today to create the retirement fund? If he can earn only 8 percent on his investments?

b. If upon retirement in 20 years Bill plans to invest the $200,000 in a fund that earns 11 percent, what is the maximum annual withdrawal he can make over the following 15 years?

c. How much would Bill need to have on deposit at retirement to annually withdraw $35,000 over the 15 years if the retirement fund earns 11 percent?

d. To achieve his annual withdrawal goal of $35,000, calculated in part c, how much more than the amount calculated in part a must Bill deposit today in an investment earning 10 percent annual interest?

Reference no: EM1330495

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