posted by Anonymous on .
Sir wants to save money to meet 3 goals. He would like to retire 30 years from now with retirement income of $25k monthly for 20 years, with the first payment received 30 years and 1 month from now. He would like to purchase a cabin in 10 years at a cost of $350k. After he passes on at the end of 20 years of withdrawals, he would like to leave inheritance of $750k to his niece. He can afford to save $2.1k monthly for the next 10 years. If he earns 11% EAR before he retires and 8% EAR after he tires, how much will he have save each month in years 11 through 30?
k (before retired) = (1.11)^1/12 - 1 = .00873
k (after retired) = (1.08)^1/12 - 1 = .0064
PV = 25000 ((1- 1/1,00873^120)/,00873)) = 1 854 590.51
I stopped here because I'm far off from the text answer.
Text answer: 3 053.57
Please help me by providing a thorough solution to the question.