Explaining investment in mutual fund to get good return


1) Your sister turned thirty five today, and she is preparing to save= $5,000 per year for retirement, with 1st deposit to be made 1 year from today. She will invest in mutual fund which will give a return of 9.5% per year. She plans to retire 30 years from today, when she turns sixty five, and she expects to live for twenty five years after retirement, to age 90. Under these suppositions, how much can she spend in each year after she retires? Her first withdrawal will be made at commencement of her 1st retirement year.

2) You expect that you will require= $2,250,000 when you retire 40 years from now. You plan to make= 40 deposits, beginning today, in the bank account which will pay 6% interest, compounded annually. You expect to get annual raises of= 4%, so you will raise amount you deposit each year by= 4%. (That is, your second deposit will be= 4% greater than your first, the third will be= 4% greater than the second, etc.) How much should your first deposit be if you are to meet your goal?

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Finance Basics: Explaining investment in mutual fund to get good return
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