Dollar amount at 2.5% and at 4.5%

Question

devante just retired and has 580,000 to invest. a cery safe certificate of deposit account pays 2.5% while a riskier bond fund pays 4.5% in interest. devante figures he needs 20,000 a year in interest to live on. how much should he invest in each account to make enough interest while minimizing his risk

Answer 1

At 1yr the int at .025=$606,100. There's an extra 6.1g.

formula: fv=p(1+int)^(nt)

future value

premium

int

yrs

times/yr

You'd do better at .045.