Question

You are planning to save for retirement over the next 25 years. To do this, you will invest $900 a month in a stock account and $600 a month in a bond account. The return of the stock account is expected to be 12 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a 9 percent return. |

**Required:**

How much can you withdraw each month from your account assuming
a 15-year withdrawal period? |

Answer #1

Ans:- we will first Find the FV of stock account and Bond account and then we will combine the money and use the PMT function of excel to find the monthly withdrawal.we will use the FV function of excel to find the Future value.

For Stock account Rate=12%/12, Nper=25*12,Pmt=-$900,PV=0

For Bond account Rate=6%/12, Nper=25*12,Pmt=-600,PV=0

For monthly withdrawal Rate=9%/12, Nper=15*12, PV=-$2,106,758.34 ( Total FV value of the stock account and bond account)

**Therefore, the Monthly withdrawal will be
$21,368.15.**

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