Jill's goal is to save enough for retirement so to able to
withdraw $20,000 she turns 60 years old until she turns 80 years
old. She is 30 years old now and currently have a savings of
$25,000 She projects that she would be able to deposit $3,000 at
the end of each year for the next 25 years. She sets up an
investment account with Retire Prosper Investment Co. where she is
promised her deposits will earn a compound interest of 6% per year.
The amount in her account will then be transferred to a special
term deposit account where they will earn a compound interest of 3%
for the remaining of the years before her first withdrawal date.
(the remaining balance will continue to earn the same rate of this
account).
1.What would be balance in the account when she turns 60 ?
2.By how much she will be over or below her desired goal of
yearly withdrawal?