Assume the following scenario:
Bob plans to retire in 20 years from now and wants to have the
following stream of CFs after retirement.
- Monthly payments of $4,000 for 15 years starting right after
retirement (The first payment will be at the end of the first month
in year 21).
- He then needs an extra 50000$ with the final payment (final
month of year 35).
- Starting from year 36, he wants the monthly payments to be
6000$ for 10 years (The first payment will be at the end of the
first month in year 36).
- And finally, starting from year 46, he wants the monthly
payments to grow at 0.5% per month forever (first payment will be
at the end of the first month in year 46).
The APR is 12% with quarterly compounding.
What is present value (at t = 0) of this retirement plan?