What is the nominal dollar amount of your last withdrawal

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Question - You are planning to save for retirement over the next 30 years. To save for retirement, you will invest $1,150 per month in a stock account in real dollars and $540 per month in a bond account in real dollars. The effective annual return of the stock account is expected to be 13 percent, and the bond account will have an annual return of 6 percent. When you retire, you will combine your money into an account with an effective annual return of 8 percent. The inflation rate over this period is expected to be 3 percent.

How much can you withdraw each month from your account in real terms assuming a 25-year withdrawal period? What is the nominal dollar amount of your last withdrawal?

Reference no: EM132177206

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