How much could he withdraw at year-end


Mr. Road has accumulated savings of $180,000, 9% investment interest he also has $12,000.00 in a savings account at 5% interest. Living expense about $1,500.00 per month, spend $500.00 a month on travel. Interest from a portfolio is $16,200.00 per year (9% of $180,000.00) or $1,350.00 per month. Mr. Road also receives $750.00 per month in Social Sercuity payment. Mr. Road main concern is with inflation. The inflation rate has been below 3%. What advice do you have for Mr. Road? How much could he withdraw at year-end from the portfolio if he wants to keep it real value intact? Supppose Mr. Road will live for 20 years more, how much can he afford to spend per month? Assume that the investement portfolio continues to yield a 9% rate of return and that the inflation rate will be 4%."

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Accounting Basics: How much could he withdraw at year-end
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