Lady Gaga is 30 and already worried about her future. She wantsto make sure that sheâll be able to keep up with the life standardshe got used to â at the end of the day, she was born this way andwants to die this way, too. She has couple of goals that she wantsto achieve after she retires. First, she wants to be able towithdraw $150,000 each month to cover her clothing and make-upexpenses for 15 years after she stops singing and retires at theage of 65. Second, she wants to be able to donate $3,000,000 to St.Jude Childrenâs Hospital at the age of 75. Lastly, the year sheretires, she also wants to buy a house in Honolulu, HI that costs$7,500,000 today, with the price being estimated to increase by 1%each year.
a. If she can earn 15% compounded monthly on her retirementaccount, how much does she need to deposit into her account eachmonth until retirement to achieve her goals?
b. What if she decides to save $40,000 each month for the first10 years, then not to save for 15 years (but the money still staysin the account), and to go back to saving and investing for thelast 10 years before retirement â how much would she then need tosave every month for the last 10 years to achieve the samegoals?
Lady Gaga is 30 and already worried about her future. She wantsto make sure that sheâll be able to keep up with the life standardshe got used to â at the end of the day, she was born this way andwants to die this way, too. She has couple of goals that she wantsto achieve after she retires. First, she wants to be able towithdraw $150,000 each month to cover her clothing and make-upexpenses for 15 years after she stops singing and retires at theage of 65. Second, she wants to be able to donate $3,000,000 to St.Jude Childrenâs Hospital at the age of 75. Lastly, the year sheretires, she also wants to buy a house in Honolulu, HI that costs$7,500,000 today, with the price being estimated to increase by 1%each year.
a. If she can earn 15% compounded monthly on her retirementaccount, how much does she need to deposit into her account eachmonth until retirement to achieve her goals?
b. What if she decides to save $40,000 each month for the first10 years, then not to save for 15 years (but the money still staysin the account), and to go back to saving and investing for thelast 10 years before retirement â how much would she then need tosave every month for the last 10 years to achieve the samegoals?
