You are planning your retirement in 10 years. You currently have $172,000 in a bond account and $612,000 in a stock account. You plan to add $6,800 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 10.5 percent and the bond account will earn a return of 7 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 6.25 percent. How much can you withdraw each year in your retirement? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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You are planning your retirement in 10 years. You currently have $172,000 in a bond account and $612,000 in a stock
account. You plan to add $6,800 per year at the end of each of the next 10 years to your bond account. The stock
account will earn a return of 10.5 percent and the bond account will earn a return of 7 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 6.25 percent. How much can you
withdraw each year in your retirement? Note: Do not round intermediate calculations and round your answer to 2
decimal places, e. g., 32.16.
Transcribed Image Text:You are planning your retirement in 10 years. You currently have $172,000 in a bond account and $612,000 in a stock account. You plan to add $6,800 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 10.5 percent and the bond account will earn a return of 7 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 6.25 percent. How much can you withdraw each year in your retirement? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.
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