You are trying to plan for retirement in 10 years and currently you have $300,000...
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You are trying to plan for retirement in 10 years and currently you have $300,000 in a savings account and 500,000 in stocks. In addition, you plan to deposit $10,000 per year into your savings account at the end of each of the next 5 years, and then $15000 per year at the end of each year for the final 5 years until you retire.
a) Assuming your savings account returns 10% compounded annually, and you invest in stocks will return 15% compounded annually, evaluate how much will you have at the end of 10 years.
b) If you expect to live for 20 years after you retire, and at retirement, you deposit all of your savings in a bank account paying 16%, estimate how much can you withdraw each year after you retire (making 20 equal withdrawals beginning one year after you retire) so that you end up with a zero- balance.
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