Question

im Hunter has decided to retire to Florida in 10 years. What amount should Jim invest today so that he'll be able to withdraw $25,000 at the end of each year for 30 years after he retires? Assume he can invest money at 9% interest compounded annually. A. $10,480.27 B. $105,470.27 C. $18,790.27 D. $108,490.27

Answer 1

If he wants to withdraw $25,000 each year for 30 years after his retirement 10 years from now, he should invest either letter B. $105,470.27 or D $108,490.27. While he was withdrawing $25,000.00  his investment still remains untouched for the 30 years and it is still increasing. He may increase his yearly withdrawal.