[Manny212]

So i have some hw problems to do in Finance and not too sure what to do in this one.

You are planning to save for retirement over the next 30 years. To do this, you will invest $600 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 12%, and the bond account will pay 7%. When you retire, you will combine your money into an account with a 9% return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?

Ok so first i find the total of the stock account and the bond account and then combine it? Are the stocks and bonds compounded monthly or annually? How exactly do i go about this. I'd assume i use the FVA formula after i find the totals? I've just been staring at this problem and i feel retarded not knowing how to do it but i'm a newb at Finance.

Help would be appreciated thanks guys.

[ejazbmw]

you should of called me 5 years ago when i was in managerial accounting
I have to be the worst accountant ever hahaha send me your taxes I'll do them

[phantom330]

is this meaning you are going to be taking the money out after the 30 years? Sounds like a future value calculation if that is the case. I majored in finance, can't say I miss this kind of stuff. Good luck.

[TurboFan]

If a train leaves chicago headed west at 50 mph...

$20,515.29 / mo is what I get for the withdraw for 25 years.

It's a 2 step problem. First, do the Fv calc on the stocks and the bonds sep. I had to assume monthly interest compounding, you didn't specify.

At the end of 30 years, add the account balances for the stocks and bonds together. Then run the 25 year withdraw just like you calculate a loan - it's the PMT function in Excel.

Take a look, I had to zip the file to post. No macros, just functions.

Retirement calc.zip

EDIT - warning, I'm an engineer by education! That said, now I mess with the money, and let the architects and engineers do the grinding.