Finance

You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month in a stock account and $500 a month in a bond account. The return on the stock account is expected to be 7%, and the bond account will pay 4%. When you retire, you will combine your money into an account with a 5% return. How much can you withdraw each month during the retirement assuming a 20-year withdrawal period?
A. $2,636.19
B. $2,904.11
C. $3,008.21
D. $3,037.36
E. $3,406.97
When I'm trying to solve, I end up with $3,113.04 and cannot figure out where I'm wrong. Can anyone help?

asked by Caroline
  1. You are using the percentages as APR. They are in EAR currently, convert them and you should get the right answer.

    posted by Roni

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