Today is john tardy's 47th bithday and despite his finance professor's advice, he hasn't started to save for retirement. John can't belive time has passed so quickly. John wants to retire on his 65th birthday; mortality tables indicate his lefe expectancy is 85. Therefore, he will need a retirement fund that will stustain him for 20 years, or 240 months. John intends to completelyl deplete this fund by age 85.
a. What amount of money must be in the retirement fund on John's 65th bday if he will withdraw $6,000 then and every subsequent month? John will withdarw the last payment one month before his 85th birthday for a total of 240 payments. The rate of return on the retiremnet fund is 8.9%
b. How much money must John save each moth, beginning one month from today, his 47th birthday to accumulate the necessary funds? The rate of return during this period is 12.8% per year.
c. John would like to start saving right now, but he has to pay for his daughter's college tuition. He will begin saving for his retirement in 5 years. How much must John save each month, beginning one month after his 52nd birthday to accumulate the necessary funds?