Question

Fodo wants to save money to meet three objectives. First, he would like to be able to retire 20 years from now with a retirement income of $10,000 per month for 20 years, with the first payment received 20 years and 1 month from now. Second, he would like to purchase a Porsche in 10 years at an estimated cost of $122,150. Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $424,789 to his son. He can afford to save $5,000 per month for the next 10 years. If he can earn an APR of 8.0 percent before he retires and an APR of 4.7 percent after he retires, how much will he have to save each month in Years 11 through 20?

Round your answer to two decimal places.

Answer 1