Problem
1) According to the rule of 72, how many times your money will be doubled over a 36-year period if it earns a rate of return of 8% per year? Show your work.
2) Using the rule of 72, estimate the value of an initial investment of $100K at the end of a 36-year period if it earns a rate of return of 8% per year? Show your work.
3) According to the 4% rule, what the size of your investment portfolio needs to be in order for you to withdraw an initial annual amount of $250K? Show your work.
4) Referring to part 3, what will be your 3rd annual withdrawal amount if the inflation rate during the 2 years since your initial withdrawal averaged 2% per year? Show your work.