How much can you withdraw each year in your retirement

Assignment Help Financial Management

Reference no: EM13877704

You are planning your retirement in 10 years. You currently have $162,000 in a bond account and $602,000 in a stock account. You plan to add $7,800 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 11 percent and the bond account will earn a return of 7.5 percent. When you retire, you plan to withdraw an equal amount for each of the next 23 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 6.75 percent.

Required:

How much can you withdraw each year in your retirement? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM13877704

Questions Cloud

The theory of purchasing power parity : The theory of purchasing power parity

Interest rate-perpetual stream : Given an interest rate of 7.05 percent per year, what is the value at Year 11 of a perpetual stream of $3,800 payments that begin at Year 18?

What is the market price of one of the firms new bonds : Western Equipment Company will issue 30-year, semiannual bonds with an 8.0% coupon rate and a $1,000 par value. Bonds of similar risk and maturity are currently selling to yield 7.0% in the market place. What is the market price of one of the firm's ..

What is the profitability index of the project : Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founde..

How much can you withdraw each year in your retirement : You are planning your retirement in 10 years. You currently have $162,000 in a bond account and $602,000 in a stock account. You plan to add $7,800 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..

Celebrate the end of your risk management-insurance class : You drink 5 beers to celebrate the end of your risk management and insurance class, then have an accident while driving home from the bar. The police charge you with drunk driving, and with hitting another automobile from behind. The exclusion of flo..

Rather than own a five-year bond and a fifteen-year bond : Rather than own a five-year bond and a fifteen-year bond, suppose you sell both of them and invest in two ten-year bonds. Each has a coupon rate of 8 percent (semi-annual coupons) and has a yield to maturity of 9.20 percent. What is the value of your..

What is the value of your portfolio : You own a two-bond portfolio. Each has a par value of $1,000. Bond A matures in five years, has a coupon rate of 8 percent, and has an annual yield to maturity of 9.20 percent. Bond B matures in fifteen years, has a coupon rate of 8 percent and has a..

What is the equipments after-tax salvage value : Kasper Film Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $22,500, of which 80% has been depreciated. The firm can sell the used equipment today for $7,500, a..

User Account

All Pages