The worker aged 45 wishes to accumulate a fund for retirement by depositing 100EUR at the beginning of each month for 20 years. Starting at age 65 the worker plans to make monthly withdrawal at the beginning of each month for next 15 years. Assuming that each payments are certain to be made, find the amount of each withdrawal if the effective rate of interest is 5% during the first 10 years but only 3% thereafter. Also, solve this problem assuming that he will spend 4000EUR being exactly 65.

The worker aged 45 wishes to accumulate a fund for retirement by depositing 100EUR at the beginning of each month for 20 years. Starting at age 65 the worker plans to make monthly withdrawal at the beginning of each month for next 15 years. Assuming that each payments are certain to be made, find the amount of each withdrawal if the effective rate of interest is 5% during the first 10 years but only 3% thereafter. Also, solve this problem assuming that he will spend 4000EUR being exactly 65.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 35P

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