Hello everyone
I currently stuck on this question. Could you guys there help me?
"I'm 70 this year and going to retire.
I have accumulated saving of $180,000, conservatively invested. It's yielding 9% interest.
I also have a saving account of $12,000 at 5% interest. I keep this amount intact.
I receive $750/month in security payment for the rest of my life. Given that the payment is an index for inflation.
Suppose that I will live for 20 years more and willing to use up all of my investment. Given that inflation rate is 4%."
Questions:
1. Evaluate my incomes in nominal terms
2. Evaluate my incomes in real terms.
I'm so confused as my knowledge is quite limited. Kindly leave your advices.
Thanks
In him,
Paul
I currently stuck on this question. Could you guys there help me?
"I'm 70 this year and going to retire.
I have accumulated saving of $180,000, conservatively invested. It's yielding 9% interest.
I also have a saving account of $12,000 at 5% interest. I keep this amount intact.
I receive $750/month in security payment for the rest of my life. Given that the payment is an index for inflation.
Suppose that I will live for 20 years more and willing to use up all of my investment. Given that inflation rate is 4%."
Questions:
1. Evaluate my incomes in nominal terms
2. Evaluate my incomes in real terms.
I'm so confused as my knowledge is quite limited. Kindly leave your advices.
Thanks
In him,
Paul