Jan is 62 and is considering retiring soon. She has $680,000 in a fund paying interest at an annual rate of 4.2% compounded continuously. She would like to withdraw a fixed amount continuously after she retires, and have a balance of $80,000 when she is 90 years old. Assume a continuous money flow, then she can spend $. John is 28 years old and plans to retire at 67. He wants to have a fund at 67 that will let him spend $4,500 a month after retirement, and last for 45 years. Assume a continuous money flow. Answer the following.
(a) Suppose that after his retirement John puts the money in a fund paying interest at an annual rate of 4.2%, compounded continuously. Then John will need $for his retirement.
(b) Suppose that John starts to invest a fixed amount each month from now until he retires, in a fund that pays interest at an annual rate of 6.2%, compounded continuously Then he should invest $each month.
If Jan decides to postpone her retirement for 4 years, then she can spend $each month after retirement.
If John waits until he is 35 to start investing for his retirement, then he needs to invest $amount when he retires at 67.