Part a ) Mary wants to spend $200,000 a year when she retires in 35 years. She thinks her retirement fund can safely earn 5.0% a year. About how much must Mary have in her account when she retires if she wants the account to last for 30 years?
$2,912,729
$3,074,490
$3,274,839
$6,000,00
Part b) What is the most you would pay for an annuity that will pay you $15,000 a year, starting today, for 20 years? You think that you must earn 9% interest on similar risk investments.
$300,000
$146,921
$149,252
$136,928