You are planning to save forretirement over the next 40 years. To do this, you plan to invest$5,000 a year in a stock account at the beginning of each year. In10 years, you plan to diversify your portfolio by investing $3,000a year in a bond account. The return of the stock account isexpected to be 8 percent, and the bond account will pay 4 percent.When you retire, you will combine your funds into an account with a7 percent return.
- Estimate the value of your portfolio at the end of your savingperiod (in 40 years).
- How much can you withdraw each year from your account, assuminga 30-year withdrawal period?
