Question

A couple will retire in 20 years. Currently, they have $225,000 in savings and invest $2,000 in a mutual fund each month that pays a 9% APR (monthly compounding) on average. (assume end of month contributions) A couple wishes to retire in Florence, Italy. The couple will need to withdraw $12,000 per month (beginning of the month) in retirement to live in a nice pension (apartment) near the Ufezi Museum. Their money will earn 3.6% APR with monthly compounding in retirement. They expect retirement to last 25 years. The couple will leave all remaining funds in the account to charity at the end of the 25th year. How much will they leave to charity?

Answer 1

Current amount in savings $ Years to retire Investment each month $ APR Rate FV in the account in 20 years Withdrawal each month post retirement $ APR Rate Years of retirement Amount left for charity 225,000.00 20 2,000.00 9% 9.38% $-2,860,410.27 12,000.00 3.60% 3.66% 25 $ 1,256,579.53

Formulae

A B 225000 20 3523 Current amount in savings 3524 Years to retire 3525 Investment each month 3526 APR 3527 Rate 3528 FV in the account in 20 years 3529 Withdrawal each month post retirement 3530 APR 3531 Rate 3532 Years of retirement 3533 Amount left for charity 2000 0.09 =(1+B3526/12)^12-1 =FV(B3527/12,B3524*12,B3525,B3523) 12000 0.036 =(1+B3530/12)^12-1 25 |=FV(B3531/12,B3532*12,B3529,B3528)